ARTICLE
1 August 2012

Tribunal Approves Merger In The Mining Industry

WW
Webber Wentzel

Contributor

Webber Wentzel's team of experienced advisors provide multi-disciplinary legal and tax services to clients operating in and across the African continent. Whether expanding into Africa or growing operations across the continent or globally, Webber Wentzel offers exceptional client service and has an outstanding track record of working on some of the most sustainable and transformative matters in Africa.

In July 2012 the Competition Tribunal (Tribunal) approved the sale of a silica mine between rival companies, overturning the decision by the Competition Commission (Commission) to prohibit the merger.
South Africa Antitrust/Competition Law

In July 2012 the Competition Tribunal (Tribunal) approved the sale of a silica mine between rival companies, overturning the decision by the Competition Commission (Commission) to prohibit the merger. The SamQuartz mine is one of South Africa's primary producers of high-grade silica and a key supplier to the country's clear glass and metallurgical industries.

The Commission prohibited Thaba Cheu Mining Limited's (Thaba Cheu) ZAR259 million acquisition of the SamQuartz silica mine from Petmin. In its investigation the Commission found the acquisition would allow Thaba Cheu to exert power in both downstream and upstream markets, rendering the downstream competitors reliant on their direct competitor. In addition, it concluded that SamQuartz had no meaningful competition for high-quality silica production.

The Department of Trade and Industry also raised concerns that the sale would have ripple effects on the steel, ferrochrome and foundry industries.

The Tribunal agreed with the companies' assertions that long-standing supply agreements with competitors, and commitments to supply to new entrants, eased foreclosure concerns connected with the deal.

The Tribunal approved the merger unconditionally.

Source

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More