COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:52/LM/JUL11
In the matter between:
ACQUARIUS PLATINUM SA (PTY) LTD Acquiring Firm
And
THE SOUTHERN BOOYSENDAL MINING RIGHT Target Firm
Panel : Norman Manoim (Presiding Member)
Yasmin Carrim (Tribunal Member)
Andreas Wessels (Tribunal Member)
Heard on : 24 August 2011
Order issued on : 24 August 2011
Reasons issued on : 31 August 2011
Reasons for Decision
Approval
1] On 24 August 2011, the Competition Tribunal (“Tribunal”) approved the large
merger between Aquarius Platinum SA (Pty) Ltd and the Southern
Booysendal Mining Right. We explain below our reasons for this conclusion.
The Parties to the transaction
2] The primary acquiring firm is Aquarius Platinum SA (Pty) Ltd (“AQPSA”), a private
company incorporated in terms of the laws of the Republic of South Africa.
AQPSA is controlled by Aquarius Platinum Ltd (“AQP”), a company
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incorporated in terms of the laws of Bermuda. AQPSA controls a number of
subsidiaries around South Africa; however AQP is not controlled by any
entity. For the sake of convenience, AQP and all its companies controlled by
it will be referred to as the “AQP Group”.
3] The primary target firm is a mining right applicable to an area commonly known
as “Southern Booysendal”, a portion of the Eastern limb of the Bushveld
Complex in Mpumalanga (“the mining right”). The mining right is currently
controlled by Micawber, a company indirectly wholly owned by Northam
Platinum Ltd.
4] In terms of the transaction, AQPSA proposes to acquire the mining right which is
currently controlled by Micawber 278 (Pty) Ltd, in terms of which AQPSA will
be entitled to mine Platinum Group Metals (“PGMs”) at Southern Booysendal.
The Rationale
5] The merging parties submitted that the Southern Booysendal is adjacent to
AQPSA Everest mine and that, as opposed to Micawber; due to its location,
AQPSA is uniquely placed to develop the area within a short space of time.
This, according to the parties will lead to an earlier investment and
exploitation of the mine.
The parties’ activities
6] The AQP Group is involved in PGM mineral exploration, mine development and
concentrate production. The group mines and produces PGM concentrate in
various provinces around South Africa1 as well as in Zimbabwe.
7] No mining operations have commenced in the Southern Booysendal, however,
the minerals to me mined from the area are PGMs.
The relevant market and the impact on competition
8] The Commission found that the relevant product market is that for PGMs,
1 For a list of areas where AGP Group mines, see Commission Report p.7
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minerals which are primarily used in the automotive industry to produce
autocatalysts and are also used in the production of jewellery. PGM is made
up of six elements, being platinum, palladium, rhodium, ruthenium, iridium
and osmium. With reference to previous Tribunal decisions relating to the
PGM market2, both the Commission and the merging parties submitted that
as the Tribunal has previously recognised the relevant geographic market for
PGMs as international, it is unnecessary to deviate from that decision.
9] It was submitted that although there is currently no overlap in respect of the
parties’ activities as no production of PGM in the area has commenced, there
will in future be an overlap as soon as mining commences. The merging
parties submitted that even if the merger were to be analysed on the future
overlap, it would not adversely affect competition in the PGM market as the
possible estimated market share of the merged entity in that market does not
exceed 15%. Further that there are also a number of significant competitors in
the PGM markets, which include companies such as Impala Platinum, MMC
Norilsk Nickel, Anglo-American plc, Northam Lonmin plc, and Xstrata.
10] The Commission concluded that the merger is unlikely to result in any substantial
prevention or lessening of competition in the PGM market.
CONCLUSION
11] The parties submitted that the proposed transaction will not result in
employments losses. The proposed transaction does not raise any other
public interest issues.
12] We agree with the Commission’s conclusion above and find that the merger is
unlikely to lead to any substantial prevention or lessening of competition in
the relevant market. Accordingly, we approve the above merger
unconditionally.
____________________ 31 August 2011
NORMAN MANOIM DATE
2 Two Rivers Platinum Limited and Assmang Limited, case no: 54/LM/Sep01
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Andreas Wessels and Yasmin Carrim
Tribunal Researcher: Tebogo Hlafane
For the merging parties: Werksmans Attorneys
For the Commission: Bheki Masilela
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