You are here:
SAFLII >>
Databases >>
South Africa: Competition Tribunal >>
2008 >>
[2008] ZACT 13
[Database Search]
[Name Search]
[Recent Decisions]
[Noteup]
[Help]
Mvelaphanda Resources Ltd and Northam Platinum Ltd (98/LM/Sep07) [2008] ZACT 13 (11 February 2008)
.RTF of original document
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 98/LM/Sep07
In the matter between:
Mvelaphanda Resources Ltd
Acquiring Firm
And
Northam Platinum Ltd
Target Firm
Panel
: D Lewis (Presiding Member), Y Carrim (Tribunal Member) and M Mokuena (Tribunal Member)
Heard On
: 12 December 2007
Decided on
: 12 December 2007
Reasons Issued on
: 11 February 2008
Reasons for decision
Approval
[1]
On 12 December 2007 the Competition Tribunal issued a Merger Clearance Certificate approving the
merger between Mvelaphanda Resources Ltd and Northam Platinum Ltd unconditionally. The reasons appear below.
Parties
[2]
The acquiring firm is Mvelaphanda Resources Ltd (“Mvela Resources”) a company incorporated
under the laws of South Africa whose shares are listed on the Johannesburg Stock Exchange Limited. Mvela Resources is not directly
or indirectly controlled by any one person or a firm.
[3]
The target firm is Northam Platinum Ltd (“Northam”), a company incorporated under the
laws of South Africa whose shares are listed on the Johannesburg Stock Exchange Limited. No single firm or person controls Northam.
Transaction
[4]
In terms of the proposed transaction Mvela Resources will, through Mvela Equity and Mvela Platinum
acquire control over Northam and the latter will in turn acquire control over Khumama and Micawber 278 (Pty) Ltd (“Micawber”). Mvela Resources through Mvela Debt and Mvela Equity currently holds approximately 21.8% and Anglo Platinum Limited (“APL”),
through Rustenburg Platinum Mines Limited (“RPML”) currently holds 22.4% of Northam. Post merger Mvela Resources will
hold approximately 63.4% of the entire issued share capital in Northam and Northam will in turn hold 100% of the issued shares in
Khumama and through Khumama, 100% of the issued shares of Micawber and therefore Booysendal Mining Rights.
Rationale
[5]
The parties have submitted that the rationale for the proposed transaction is to give effect to
the parties’ commitment to the transformation of South Africa and to allow APL to comply with the equity ownership requirements
of the broad–based socio economic empowerment charter for the South African mining industry. It was further submitted that
the parties wish to introduce historically disadvantaged women into the platinum mining industry.
Parties’ Activities
[6]
Mvela Resources is a broad-based, empowerment mining and minerals investment company. The group
has significant investments in high quality South African precious metal and mineral companies with operating investments in assets
in the gold, platinum and diamond sectors. In addition Mvela Resources has a number of exploration and development projects and joint ventures in sub-Saharan Africa.
[7]
Northam currently operates a platinum group metals mine at upper end of the western limb of South
African Bushveld Complex. The target firm also conducts mining operations, exploiting two reefs (the Merensky and UG2 Reefs) via
a twin shaft system.
Competition Analysis
[8]
According to the Commission there is currently no overlap in the activities of the merging parties
as the acquiring firm is not involved in platinum mining save to their minority share in Northam. The Commission however examined
the effects on competition that the proposed merger would have on the platinum market as a result of the amalgamation of the platinum
mining rights of the acquiring firm and the platinum mining activities of the target firm. The Commission also considered the effect
that the acquiring firm’s joint ventures would have on competition in the platinum market. In both instances the Commission’s
investigation found that the amalgamation of the platinum rights of the acquiring firm as well as joint ventures in the platinum
mining would have an effect of increasing the parties’ market share by 2%, from 3% to 5% once they are mined. We therefore
agree with the Commission that the proposed transaction is unlikely to substantially prevent or lessen competition in the platinum
mining market as the increase in the market shares is insignificant.
[9]
The Commission also considered the activities of the target firm in the platinum refinery market
(metallurgical processing). In its analysis the Commission found that metallurgical processing comprises of four phases, namely:
concentration, smelting, base metal removal and refining. An examination of this market by the Commission found that the target firm’s
competitors are Anglo Platinum, Impala Platinum and Lonmin in respect of the first three phases. The Commission’s investigation revealed that in the platinum refinery market the market shares ranges between 32% to 51% for
Anglo Platinum, 15 to 19% for Impala Platinum and 11 to 17% for Lonmin and the remaining players including Northam have less than
10%. We therefore agree with the Commission that the proposed transaction is unlikely to substantially prevent or lessen competition
in the refinery market as there are significant players that refine platinum in terms of different stages.
Public Interest Issues
[10].
There are no public interest issues.
Conclusion
[11]. Based on the above, we find that the transaction will not result in a substantial lessening or prevention of competition in
the identified markets and is accordingly approved unconditionally.
___________________
11 February 2008
Y Carrim
Date
Tribunal Member
D Lewis and M Mokuena concurring.
Tribunal Researcher
: J Ngobeni
For the merging parties
: Bowman Gilfillan and Brink Cohen le Roux
For the Commission
: Mthunzi Mashaba
SAFLII:
|
Terms of Use
|
Feedback
URL: http://www.saflii.org/za/cases/ZACT/2008/13.html
