ANSAC SODA ASH IMPORTS AT RISK

UNCLAS PRETORIA 001667 SIPDIS SENSITIVE STATE PLEASE PASS USAID STATE PLEASE PASS USGS DEPT FOR AF/S, ISN, EEB/ESC AND CBA DOE FOR T.SPERL, G.PERSON, A.BIENAWSKI, M.SCOTT, L.PARKER DOC FOR ITA DIEMOND E.O. 12958: N/A TAGS: ETRD ECON EMIN SF SUBJECT: ANSAC SODA ASH IMPORTS AT RISK ¶1. (SBU) SUMMARY: American National Soda Ash Corporation (ANSAC) CEO John Andrews told Ambassador that the company was going to reduce soda ash shipments to customers in South Africa because of uncertainty related to its on-going competition case and its separate application to the Department of Trade and Industry (DTI) for an exemption as a "critical industry". Ambassador agreed to write a letter to DTI urging an expeditious decision on the petition. End Summary. -------------- Soda Ash Woes -------------- ¶2. (SBU) American National Soda Ash Corporation CEO John Andrews met on July 29 with Ambassador to provide an update on the challenges it faces in importing soda ash into South Africa on behalf of four soda ash producers from Wyoming. The Competition Commission will hold hearings on whether ANSAC is a cartel in late August. This process has been going on for many years and the time-frame for a decision is unclear. ANSAC has separately petitioned DTI for a designation as "critical industry" to gain an exemption from the Competition Commission rulings. Andrews asserts that there is a global shortage of soda ash and ANSAC's own supply is "sold out". He said that ANSAC will notify the SAG and customers that it is cutting its supply to 80 percent immediately and 50 percent in a few weeks, based on the uncertainty of its legal status in South Africa. Andrews said South African customers (glass, detergent, and minerals processing - platinum, vanadium, and uranium) will be hurt by this commercial decision which has been forced on them. According to Andrews, ANSAC has about a 25 percent share of the South African market and has been doing business for thirty years in the country. -------------- Embassy Action -------------- ¶3. (SBU) Andrews asked for an Embassy overture to the DTI in support of its "critical industry" petition, building on USTR Schwab's raising this issue last week with Trade Minister Mpahlwa in Washington. Ambassador agreed to write a letter to DTI urging expeditious processing of the application, but he cautioned that the Embassy could not take a position on the legal case. CSSA is drafting this letter. CSSA and Econ will attend the August 25 hearing when ANSAC testifies. BOST