The competition tribunal hearings were contested by Lonmins largest trade union, the Association of Mineworkers and Construction Union over the possibility of job losses. (Paul Botes/M&G)
Gold and platinum producer Sibanye-Stillwater’s acquisition of Lonmin is one step closer to becoming a reality after the South African Competition Tribunal approved the transaction subject to the agreed conditions between the two companies on Wednesday.
The deal that was expected to close in the second half of this year will most likely close in the first quarter of 2019.
The conditions include a moratorium on retrenchments at Lonmin for six months, approval from Sibanye and Lonmin shareholders and the sanction of a UK court.
Lonmin’s primary listing is on the London stock exchange, in order for the company to be delisted from the stock exchange, it will need the approval (sanction) of a UK court.
The moratorium excludes voluntary separation packages, and, according to Wednesday’s press release, did not prevent Sibanye from initiating section 189 proceedings of the Labour Act — as long as this action falls outside the six-month period.
The approval by the competition commission has been welcomed by both companies.
“We are pleased by the Tribunal’s decision to approve the Transaction with Sibanye. Despite our enviable mine to market operations and our positive Q4 performance, the fundamental challenges the company faces as a standalone business remain,” said Lonmin CEO Ben Margara.
“Consolidation provides a sustainable solution to the industry’s challenges,” added Margara. “Consequently, we firmly believe that the Transaction is in the best interests of Lonmin shareholders and all other stakeholders of Lonmin, providing the company with a comprehensive and more certain solution.
Sibanye CEO Neal Froneman believes that the transaction will “ensure a more sustainable and positive future for these assets and bring greater stability to the region”.
Sibanye announced its planned acquisition of Lonmin in December 2017. Despite recent improved results, Lonmin has $150-million loan that has been waived to February pending Sibanye’s acquisition of Lonmin.
Lonmin employs 33 000 employees and a Sibanye buyout is expected to save many of these jobs.
If it receives approval from both Lonmin and Sibanye shareholders, Sibanye will become the second largest platinum producer in the world, with 38 909 permanent employees, in comparison to its rival Anglo American Platinum’s (Amplats) which has a total of 25 320. The largest platinum employer is Impala Platinum with 52 012 employees.
The competition tribunal hearings were contested by Lonmin’s largest trade union, the Association of Mineworkers and Construction Union (Amcu) over the possibility of job losses, Business Day reported.
Amcu downed tools at a Sibanye mine on Wednesday evening, but not over the mining company’s acquisition of Lonmin. Amcu leader Joseph Mathunjwa accused Sibanye of “not sharing the wealth” with its workers.
The trade union is demanding a R1 000 increase of the next three years. On November 14, Sibanye closed wage discussions with National Union of Mineworkers (NUM), Solidarity and UASA. These unions agreed to a R700 increase for the next two years for most of the employees, and R825 increase in the third year.