Public interest considerations
Whilst the merger raised no competition concerns the public interest concerns were more difficult. In terms of section 12A(3) one
of the public interest grounds we have to consider is the effect that the merger will have on employment. It is well known that due
to the unfavourable conditions in the mining industry a large number of jobs are being lost.
The merging parties have informed us that if the merger is implemented a large number of jobs will be lost at both mines. However
they argue that if the merger does not proceed Anglogold will have to effect measures to drastically downscale both operations and
the result would be that more jobs would be lost if the merger is not implemented.
Should the transaction not take place, Deelkraal will be closed by July 2001 which will place 3100 jobs in jeopardy while mining output
at Elandskraal will be significantly reduced, which would place approximately 1500 jobs at risk.
If the acquisition goes ahead Harmony will reduce operations at Deelkraal to ensure that the remaining life of the operation is extended
to four years. This will affect 1600 jobs, 400 being supervisory and managerial levels and the remainder from lower levels. Although
Harmony will not cut back the production output at Elandsrand it will restructure the operation to ensure that it focuses primarily
on rock breaking, its core business, thereby extending its life by more than 20 years. Approximately 400 jobs could be affected,
with 90% being at supervisory and managerial level.
Two trade unions the National Union of Mine Workers (NUM) and United Association of South Africa (UASA) attended the Tribunal hearing.
NUM indicated to the Tribunal that it was not against the merger as such but expressed concern about the extent to which restructuring
in the mining industry resulted in job losses and said that the Tribunal should, therefore, not assess this transaction in isolation
but as part of a much broader restructuring process. The Num suggested that greater obligations should be placed on the seller, Anglogold,
to absorb the social implications of the merger. No specific suggestions were made to us as to what these should be. It must be observed
that the acquiring firm will be subject to the same obligations as the seller in relation to employees’ rights. Employees who
are retrenched post-merger will receive the equivalent benefits to employees who might have been retrenched by the respective mines
if they had remained in the Anglogold group.
On the evidence before us we agree with the Commission’s conclusion that the effect on employment will be more adverse if the
transaction is prohibited. Since no conditions have been suggested to us to attach to the approval we approve the merger unconditionally.
19 April 2001
N.M. Manoim
Date
Concurring: D.H. Lewis and D.R. Terblanche
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