Thursday, 01 August 2019 12:30

Press Release - Interim Measures against ELMIN - Hellenic Mining Enterprises S.A.

Subject: Decision on the ex-officio order of interim measures, according to article 25 par. 5 of law 3959/2011, against the company “ELMIN- Hellenic Mining Enterprises S.A.”, active in the bauxite production and marketing, following the request for ordering interim measures, under ref. no. 7829/20.12.2018, by the company “MYTILINEOS HOLDINGS S.A.”, as well as its submitted complaint, under ref no. 6633/ 23.09.2016, against the companies “KERNEOS S.A.” and “ELMIN- Hellenic Mining Enterprises S.A.”, for possible infringement of articles 2 of law 3959/2011 and 102 TFEU.

The Plenary Session of the Hellenic Competition Commission (HCC), with its Decision 690/30.07.2019 on the ex-officio ordering of interim measures, pursuant to article 25 par. 5 of law 3959/2011, against the company “ELMIN- Hellenic Mining Enterprises S.A.”, active in the bauxite production and marketing, following the request for ordering interim measures, under ref. no. 7829/20.12.2018, by the company “MYTILINEOS HOLDINGS S.A.”, as well as its submitted complaint, under ref no. 6633/ 23.09.2016, against the companies “KERNEOS S.A.” and “ELMIN- Hellenic Mining Enterprises S.A.”, for possible infringement of articles 2 of law 3959/2011 and 102 TFEU, decided by open vote the following:

  1. By majority, with a minority of two members, that the conditions for taking interim measures are met cumulatively in accordance with the provision of article 25 par. 5 of law 3959/2011, as analyzed below:
  1. Regarding the probability/prospective of infringement of abuse of dominance, the behavior of ELMIN is likely to fall within the specific cases of abuse provided for by articles 2 of law 3959/2011 and 102 TFEU, consisting of:
  • unjustified refusal to sell in order to impose unreasonable terms, combined with
  • indirect imposition of unreasonable terms of sale and
  • restriction of production to the detriment of consumers.

Specifically, the sudden and significant reduction on behalf by ELMIN, of the quantity to be supplied to MYTILINEOS, entails a restriction on the availability and supply of the market with bauxite products and its derivatives, in a manner and to a degree that this restriction implies a possible exclusion/ exit of suppliers/products of companies from these markets and as a result a risk of weakening inter-brand competition, possible reduction of supply and / or increase of the price, and consequent probable damage/harm to final consumers.

  1. There is an urgent need to prevent an immediate imminent risk of irreparable damage to the public interest given that the evidence of the case file shows that:
  • MYTILINEOS faces difficulties in finding alternative sources of supply of bauxite, to replenish the missing quantities.
  • There is a difficulty in finding alternative sources of supply of bauxite on behalf of companies operating in the downstream markets, possibly risking their exclusion from these markets.
  • The sudden and poorly justified reduction by ELMINof the bauxite quantities provided to MYTILINEOS makes impossible the immediate replenishmentof the missing quantities.
  • Due to the uncertainty of securing the required quantities at the stage of negotiations and the planning of a reduced supply of bauxite quantities, according to the contract, signed on 22.03.2019, between the parties with the reservation on behalf of MYTILINEOS, both the activity of MYTILINEOS and the smooth supply of the downstream market are endangered.
  • The problematic operation of the factory of MYTILINEOS, with consecutive interruptions of operation poses the risk of accidents which may lead to the reduction of the productive capacity of MYTILINEOS, while at the same time the unorthodox/distorted production process followed to compensate for the reduced quantities offered by ELMIN, can lead to the loss of control of alumina granulometry. As a matter of fact, this could lead to zero production of usable product, a fact that causes a risk of irreparable damage to the public interest, due to the consequences it will have on sales to distributors operating in Greece.

II. Unanimously, that the following interim measures shall be taken ex officio:

  • The company ELMIN should immediately supply MYTILINEOS with the required quantities of standard quality of bauxite for the year 2019, with respect to the quantities of bauxite supplied during year 2018, in order to account for the possible systemic risk in the relevant markets. In particular, given the fact that the total quantity of bauxite sold during year 2018 by ELMIN was 770,000MT, ELMIN will have to supply MYTILINEOS with a quantity corresponding to the difference in the quantities between the two years (770.000ΜΤ-550.000ΜΤ=220.000ΜΤ), in proportion to the remaining months and until the termination of the contract signed on 22/03/2019 between the two parties, namely to supply an extra of 18.333ΜΤ bauxite of standard quality per month at the contractually defined price of the product in question and for a period of 5 months until the termination of the contract on 31/12/2019, that is to say that the total quantity to be delivered is 18.333ΜΤ Χ 5 Months = 91.665ΜΤ. In order to implement this, ELMIN within 10 days of the notification of the operative part of the decision, shall amend the contract, signed between the two parties on 22/03/2019, with the reservation on behalf of MYTILINEOS, and to notify the Commission of its actions within 10 days of their completion.
  • The company ELMIN should launch negotiations with MYTILINEOS in order to conclude a contract for the supply of bauxite, capable of ensuring the smooth operation of MYTILINEOS and of the downstream market for the period after the termination of the current amended contract. The negotiation, for which relevant minutes will be kept, should start within 20 days from the notification of the operative part of the interim decision and should be completed within two months from its commencement. ELMIN shall notify proof of its actions together with the minutes of the negotiations within 10 days from the end of the negotiations.
  • In case of omission of the above, the Hellenic Competition Commission threatens ELMIN with a fine of €8.000 for each day of infringement, which is imposed with a Decision issued for non-compliance.

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