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[2016] ZACT 50
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Sibanye Platinum Bermuda(Pty)Ltd v Aquarius Platinum Ltd (LM186Nov15) [2016] ZACT 50; [2016] 1 CPLR 237 (CT) (16 March 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM186Nov15
In
the matter between:
SIBANYE
PLATINUM BERMUD
A
-(PTY)
LTD
Primary Acquiring Firm
and
AQUARIUS
PLATINUM
LTD
Primary Target Firm
AND
In
the matter between:
Case
No: LM178Nov15
SIBANYE
PLATINUM BERMUDA (PTY) LTD
Primary Acquiring Firm
and
THE
RUSTENBURG MINES
(A
DIVISION OF RUSTENBURG PLATINUM MINES
LTD
)
........................
Primary
Target Firm
Panel
........................................................
: Norman Manoim (Presiding Member)
Anton
Roskam (Tribunal Member)
Medi
Mokuena (Tribunal Member)
Heard
on
...............................
................
:14 March 2016
Last
additional information
received
on
.............................................
:14
March 2016
Orders
issued on
…..............................
:
16 March 2016
Reasons
issued on
…............................
:
26 April 2016
REASONS
FOR DECISIONS
INTRODUCTION
[1]
On 16 March 2016, the Competition Tribunal ("Tribunal")
conditionally approved the following two acquisitions: (1)
the
acquisition of Aquarius Platinum Mine Ltd ("Aquarius") by
Sibanye Platinum Bermuda (Pty) Ltd ("BidCo");
and, (2) the
acquisition. of the Rustenburg Mines (a Division of Rustenburg
Platinum Mines Ltd) ("Rustenburg Mines")
by Sibanye
Rustenburg Platinum ii/lines (Pty) Ltd ("Sibanye- Platinum").
For convenience, we refer to these two acquisitions
as "the
Sibanye - Aquarius merger" and "the Sibanye - Rustenburg
Mines merger".
[2]
The reasons for the conditional approvals are set out together
because the two acquisitions were heard simultaneously and they
are
linked, especially with regard to the public interest issues. We
will, however, begin by considering the competition issues
of each
acquisition.
THE
SIBANYE -
AQUARIUS MERGER
P
RIMARY
ACQUIRING FIRM
[3]
The primary acquiring firm is BidCo, a company incorporated in
accordance with the laws of Bermuda. BidCo is a newly established
company for the purposes of this transaction and intends to register
in South Africa. BidCo is wholly owned and controlled by Sibanye
Gold
Ltd ("Sibanye Gold"), a public company with a primary
listing on the Johannesburg Stock Exchange. Sibanye Gold is
not
controlled by any firm. For the purposes of these reasons, Sibanye
Gold and its subsidiaries will collectively be referred
to as
"Sibanye".
[4]
Sibanye owns and operates four underground and surface gold
operations. These operations are the Cooke, Driefontein and Kloof
operations in the West Witwatersrand region, and the Beatrix
operation in the southern Free State province.
[5]
In addition to its mining activities, Sibanye owns and manages
significant extraction and processing facilities. Sibanye also,
as a
by-product of the gold ore refining process at Rand Refinery,
produces a small amount of silver that is melted and refined
into a
product suitable for sale.
[6]
Furthermore, Sibanye has a number of organic projects, including the
West Rand Tailings Retreatment Project (WRTRP) on the Far
West Rand
and the Burnstone project on the South Rand of Gauteng province as
well as the Beisa North, Beisa South, Bloemhoek, De
Bron-Merriespruit, Hakkies and Roblin projects in the Free State.
PRIMARY
TARGET FIRM
[7]
The primary target firm is Aquarius, a public company incorporated in
accordance with the laws of Bermuda. Aquarius has its
primary listing
on the Australian Securities Exchange, a secondary listing on the
Johannesburg Stock Exchange and a premium listing
on the London Stock
Exchange. Aquarius is not controlled by any firm.
[8]
Aquarius focusses on the mining of platinum, palladium and rhodium.
It also produces ruthenium and iridium in very small quantities
as
co-products. Aquarius also produces PGM by-products such as nickel,
copper and chrome and chromite, as well as a relatively
small amount
of gold.
[9]
Aquarius's operations comprise of the Kroondaal, Mimosa, Marikana
Platinum Mine and Platinum Mile retreatment facility.
PROPOSED
TRANSACTION AND RATIONALE
[10]
In terms of the proposed transaction, Sibanye Gold through BidCo
intends to acqurre 100% of the issued share capital of Aquarius
and
amalgamate. BidCo and Aquarius in accordance with the Bermuda
Companies Act of 1981. BidCo and Aquarius will post-merger operate
as
one company under the name BidCo. On completion of the proposed
transaction, Sibanye will have sole control of BidCo.
[11]
According to Sibanye Gold, this transaction will assist Sibanye in
its growth strategy in the mining sector, as Aquarius is
a
well-managed and well-resourced company.
[12]
In addition, the transaction has a strong strategic and financial
rationale, both as a standalone transaction and when considered
in
conjunction with the proposed Sibanye-Rustenburg merger.
[13]
Aquarius, on the other hand, submits that the current transaction
provides it with an opportunity to realise its investment.
COMPETITION
ASSESSMENT
[14]
The proposed transaction gives rise to a horizontal overlap. The
relevant product market is the international market for the
production and supply of gold. Post-merger the merged entity will
have a market share of less than two percent. In line with this,
the
Commission concluded that this transaction is unlikely to
substantially prevent or lessen competition in the identified market.
[15]
None of the parties represented at the hearing indicated that the
proposed transaction was anti-competitive.
[16]
We concur with the Commission's conclusion.
THE
SIBANYE - RUSTENBURG MINES MERGER
PRIMARY
ACQUIRING FIRM
[17]
The primary acquiring firm is Sibanye Platinum, a newly established
company incorporated in accordance with the company laws
of South
Africa. Sibanye Platinum is wholly owned and controlled by Sibanye
Gold, which is described in paragraphs [4] to [6] above.
PRIMARY
TARGET FIRM
[18]
The primary target firm is The Rustenburg Mines, a division of
Rustenburg Platinum Mines Ltd ("RPM"), a company
incorporated in accordance with the company laws of South Africa. RPM
is a wholly owned subsidiary of Anglo American Platinum Ltd
("Anglo
American Platinum"), a company listed on the Johannesburg Stock
Exchange. Anglo American Platinum is, in turn,
ultimately controlled
by Anglo American Pie ("Anglo American"). Anglo American is
listed on the London, Johannesburg,
Swiss, Botswana and Namibian
Stock Exchanges. Anglo American is not controlled by any firm.
[19]
The Rustenburg Mines is a mining and concentrating complex comprising
of the Bathopele, Siphumelele and Thembelani mining operations,
two
concentrating plants, an on-site chrome recovery plant and the
Western Tailings Retreatment plant. The concentrate produced
at the
Rustenburg Mines also contains (as by-products or co-products) gold,
nickel, copper, chrome, silver and cobalt. The Platinum
Group Metals
("PGMs") concentrate produced at the Rustenburg Mines is
supplied to RPM's Waterval Smelter and is- then
smelted and refined
to produce various PGMs and base metals: which are, in turn, sold by
RPM to third party domestic customers
or to Anglo Platinum Marketing
Ltd ("APML"), which on-sell the refined PGMs (and base
metals) to customers throughout
the world.
PROPOSED
TRANSACTION AND RATIONALE
[20]
In terms of the Sale and Purchase Agreement, Sibanye Gold through its
newly established company, Sibanye Platinum, intends
to acquire the
Rustenburg Mines as a going concern. On completion of the proposed
transaction Sibanye Gold will wholly own and
control the Rustenburg
Mines.
[21]
According to Sibanye Gold, this transaction will assist Sibanye Gold
in its strategy of growth in the mining sector. Anglo
American
Platinum believes that Sibanye Gold is an appropriate new owner for
the Rustenburg Mines, which are quality assets with
long term and
sustainable potential under Sibanye Gold's control.
COMPETITION
ASSESSMENT
[22]
The proposed transaction gives rise to a horizontal overlap. The
Commission identified the relevant product market as the
international market for the production and supply of silver and
gold. This is because both merging parties are active in the
identified
market. In the market for the production and supply of
gold and silver the merged entity will have a post-merger market
share of
less than 2%.
[23]
The Commission also took into account that Sibanye will also be
acquiring Aquarius.
[24]
In the international market for the miming of PGMs, the Commission
found that the merged entity will have a post-merger market
share of
less than 12%.
[25]
The Commission therefore concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market.
[26]
None of the parties represented at the hearing indicated that the
proposed transaction was anti-competitive.
[27]
We concur with the Commission's conclusion.
PUBLIC
INTEREST
CONSIDERATIONS
OF
THE
MERGERS
[28]
The Commission identified two public interest concerns: employment
and Black Economic Empowerment ("BEE") procurement
pertaining to small and medium enterprises ("SMEs").
EMPLOYMENT
[29]
Aquarius, the target firm in this merger, owns the Kroondaal
operation. The Rustenburg Mines (a division of Rustenburg Platinum
Mines Ltd), which is the target firm in the other merger, owns the
Bathopele Mine. The two mergers involve a potential consolidation
of
certain activities of the Bathopele and Kroondaal operations. Both
these operations mine the same body of ore. Therefore, the
proposed
transactions could have a negative impact on employment.
[30]
As a result of the rationalisation of the Kroondaal and Bathopele
operations, it was recognised that the following employees
could
possibly be dismissed for operational requirements: (1) 14 non-site
employees who occupied duplicate positions in the Patterson
Grades C
and above ("the 14 employees' category"); and, (2) about
260 employees who occupied positions in the Patterson
Grades C and
below ("the 260 employees' category"). The Patterson C
grade positions in the first and second categories
relate to
different positions.
The
Relevant Legal Principles
[31]
In
the
Metropolitan
and Momentum
merger
[1]
the
Tribunal,
after
referring
to
section
12A
of
the
Competition
Act, 1998
(Act
89
of
1998)
("the
Competition
Act"
;),
and
in
particular
sections
12A
(1)(b)
and
3>
12 A(3),
held that
"once
a
prima
facie
ground
has
been
alleged
that
a
merger
may
not
be
justifiable on substantial
public
interest
grounds,
the
evidential
burden
.
.
.
shifts
to
the
merging
parties
to
rebut
it."
The
two
criteria
to
be
considered
in
determining
whether
or
not the
merger
is
warranted
are:
"1)
a rational process has been followed to arrive at the determination
of the number of jobs to be lost, i.e. that the reason
for the job
reduction and the number of jobs proposed to be shed are rationally
connected; and
2)
the public interest in preventing employment loss is balanced by an
equally weighty, but countervailing public interest, justifying
the
job loss and which is cognisable under the Act."
The
Commission's Submissions
[32]
The Commission submitted that there should be an indefinite
moratorium on dismissals for operational requirements as a result
of
the mergers except for the four positions classified as top executive
positions. The executive positions identified were the
chief
executive officer ("CEO"), the managing director, the
company secretary and the environmental manager. The reason
for the
exception was that the persons who occupied these positions probably
enjoyed re-employment opportunities.
[33]
As regards the indefinite nature of the employment condition, Mr
Quilliam of the Commission, pointed out that the Commission
would
prefer an indefinite timeframe, although he was aware that the
Tribunal had previously maintained that a moratorium on retrenchments
relating to the merger itself could not be indefinite.
[34]
The Commission contested both criteria set out above; namely, that a
rational process has been followed to arrive at the determination
of
the number of jobs to be lost and that the public interest in
preventing the employment losses was balanced by an equally weighty
and countervailing public interest recognised by the
Competition Act
that
justified the job losses.
The
Merging Parties' Submissions
[35]
The merging parties submitted that in principle the employment
conditions relating to the mergers be as follows.
[36]
Both mergers should be approved on the general employment condition
that no dismissals for operational requirements (i.e.
"retrenchments") take place at the merging parties'
operations as a result of the mergers for a period of 24 months after
the date of implementation of the mergers.
[37]
The exceptions to this general employment condition be that the
acquiring firms in each merger be able to-retrench as a result
of the
merger the employees in the 14 employees' category and the 260
employees' category within the 24- month period after the
implementation date of the mergers. Therefore, the -number of
potential retrenchments would be limited to these two categories
of
employees during the 24-month period after the implementation of the
mergers.
[38]
The merging parties in both mergers made a number of submissions in
support of their proposal.
[39]
The first submission, which was in line with the first criterion
quote above, was that the reason for the job reductions and
the
potential number of job reductions during the 24-month period were
rational y connected.
[40]
In support of this submission, Mr Cockrell, who appeared for the
merging parties in this merger and Sibanye Rustenburg Platinum
Mines
(Pty) Ltd in the other merger, called Dr Richard Stewart, the Senior
Vice-President of Business Development at Sibanye, and
Jean Nel, the
CEO at Aquarius, to provide information to the Tribunal.
[41]
Dr Stewart explained that it was difficult at this stage to determine
precisely how many employees would be affected. The reasons
for this
included the difficulties of the due diligence process given the
structures of the businesses being bought and how they
were serviced
by the companies that owned them, the lack of detailed information
about job descriptions and functions and the difficulty
of predicting
what a particular job would be required to do 12 or 24 months after
the implementation of the mergers.
[42]
He also stated that in investigating the number of potential
retrenchments, the acquiring firms had decided that they would
try to
protect jobs in the Paterson A and B grades, because employees in the
Patterson C grade and grades above the C grade had
better
opportunities of finding alternative employment.
[43]
Dr Stewart explained the process of arriving at the number of
employees in the 14 employees' and 260 employees' categories.
The
first process involved a process of identifying duplicate roles. The
second involved analysing historical transactions.
[44]
In respect of the 260 employees' category he indicated that the
merging parties would be willing to cap the figure at 250 employees.
[45]
Dr Stewart also explained that the 14 employees' category comprised
top executives, payroll clerks and senior technical managers.
[46]
Mr Nel also provided the Tribunal with information about how the
number of potential retrenchments were calculated if the proposed
consolidation of the Kroondaal and Bathopele mines took place. In
essence, it involved analysing the services that were shared
by the
two mines. It emerged from Mr Nel's evidence that the calculations
were complicated because Aquarius did not use the Patterson
grading
system and therefore alignment was difficult.
[47]
Based on the information provided by Dr Stewart and Mr Nel, it was
submitted that a rational process has been followed to arrive
at the
determination of the number of jobs that might be lost.
[48]
In relation to the second criterion - the public interest in
preventing employment loss being balanced by an equally weighty,
but
countervailing public interest, justifying the job loss and which is
cognisable under the Act - Mr Cockrell submitted that
two
considerations were important. The first was the effect of the
mergers on a particular industrial sector or region; the second
was
the effect of the mergers on employment These factors are listed in
section 12A(3)(a)
and (b) of the
Competition Act respectively
.
[49]
As regards to the effect of the mergers on a particular industrial
sector or region, Mr Cockrell submitted that it was well
known that
the platinum mining sector was in decline in the Rustenburg area. He
indicated that a number of mines in the Rustenburg
area had already
ceased production and that this included three mines in the immediate
vicinity of the Kroondaal and Bathopele
mines.
[50]
In support of this contention, he referred to a letter from the
Rustenburg Chamber of Commerce which stated, amongst other
things,
that "the South African and international commodities market in
the mining sector [was] experiencing the worst economic
pressures it
had [had] to deal with in decades."
[51]
The letter also stated that this had had a negative impact on many
businesses. It stated that "[m]any businesses [had]
closed doors
as a direct result of the impact of these and current low levels of
dispensable income of the affected communities
as well as lower
volumes of business experienced by companies selling goods and
services to the mine[s]." In addition, the
letter referred to
Lonmin's announcement in June of 2015 that it had to shed 3 500 jobs
at its operations and the consequent dire
consequences this had had
for the affected employees and their households.
[52]
Mr Cockrell submitted that juxtaposed to this was Sibanye's vision,
which included prolonging the life of mines, which would
not only
provide a sustainable plan for the jobs of the majority of
employees, but would also secure the incomes of all the
dependent
families.
[53]
Lastly, Mr Cockrell referred to concluding remarks in the letter from
the Rustenburg Chamber of Commerce. It stated as follows:
"The
mining sector, Rustenburg businesses and communities cannot afford
that this opportunity of a rescue plan by Sibanye
not be
implemented."
[54]
As regards the effect of the mergers on employment, it was submitted
that if the mergers were approved subject to the conditions
proposed
by the Commission, the mergers would not be implemented, as it would
not make commercial sense to do so. This would result
in shafts being
closed at the Rustenburg Mines and at Aquarius with many jobs being
lost.
[55]
In support of this contention, Mr Cockrell referred to an extract of
a report from the Bagatla Ba Kgafela Investment Holdings,
one of
shareholders in the future empowerment deal. It stated as follows:
"In
the event the transaction is approved, there may be some jobs lost, a
relatively small number of higher skilled educated
employees that
have- in many Gases management or supervisory responsibilities.
However, if the transaction does not go through,
there is a real
possibility that Anglo Plats may shut down the mines. Having
cognisance to the multiplier effect, this outcome would be
catastrophic
to
the
Rustenburg
region,
surrounding
communities
and the
country
at
large.
It
is
irrefutable
that
the
transaction will
have
a
positive
net
effect
on
employment
and
the public
interest
insofar
as it is
intended
to avoid
large
scale job losses
and
significant
impacts
on
local
businesses and
the
knock-on
effect
on
the
general
community that
would likely
result
from same."
[56]
Mr Wilson, who appeared for the Rustenburg Mines in the Sibanye -
Rustenburg Mines merger asked Mr Poggiolini, the Head of
Strategy at
Anglo American, to provide information to the Tribunal.
[57]
Mr Poggiolini dealt with the current life expectancy of the
Rustenburg Mines - Bathopele, Siphumelele and Thembalani. He stated
that Khuseleka, which is part of the Thembalani operations, would
close in 2019 and the rest of the operations would end in 2026.
[58]
Mr Poggiolini also stated that at current prices all these mines are
sub economic. He stated that Anglo American Platinum's
policy
was that all mines had to break even after capital expenditure. He
therefore indicated that failing the conclusion of the
Sibanye -
Rustenburg Mines merger, steps would need to be taken to improve the
cash flow position of the Rustenburg operations
and it was likely
that Anglo American would not be prepared to invest the required
funds in the mines. He also indicated that if
the merger did not go
ahead, restructuring would be required, including the closure of
shafts, which could result in about 13 000
employees at all levels
losing their jobs.
[59]
In contrast to Mr Poggiolini's representations about what would
transpire if the merger was not implemented, Neil Froneman,
the CEO
of Sibanye Gold, dealt with the public interest consequences of the-
mergers if they were to be implemented. Mr Froneman
submitted that
effectively about 25 000 jobs in the Rustenburg area would be saved
as a result of the transactions going ahead.
He stated that if the
Tribunal imposed the Commission's set of conditions, the mergers
would not be implemented, as it would not
be feasible to -continue
with the businesses post-merger.
[60]
Therefore, the merging parties submitted that the public interest in
preventing employment loss because of the proposed consolidation
of
the Kroondaal and Bathopele mines was balanced by an equally weighty
and countervailing public interest - the likely positive
effects of
the proposed mergers upon the platinum mining sector and the
Rustenburg area and upon employment as a whole.
THE
UNIONS' SUBMISSIONS
[61]
Employees of the merging parties were represented by United
Association of South Africa ("UASA"), Solidarity, the
Association of Mineworkers and Construction Union ("AMCU")
and the National Union of Mineworkers ("NUM").
[62]
Solidarity's Mr Schoeman indicated that Solidarity recognised that
there was a need to institute drastic reforms to the platinum
industry. He stressed that job losses should be an absolute last
resort. He therefore supported a moratorium on possible dismissals
for two reasons. The first was that a moratorium would lead to lesser
dismissals as a result of natural attrition. The second was
that the
moratorium gave the unions time to prepare their members for the
possibility of the dismissals and to institute measures,
such as
re-skilling their members, to ameliorate the adverse effects of the
possible dismissals.
[63]
Ms Freese, who appeared for AMCU, submitted that there should be a
three-year moratorium on all dismissals for operational
requirements
as a result of the mergers. She also submitted that if retrenchments
were necessary, then there should at least be
a three-year moratorium
on retrenchments for unskilled and semiskilled workers; namely, those
workers falling within the Patterson
A and B grades.
[64]
UASA's Mr Van Heerden supported his trade union colleagues'
submissions.
He
proposed that there be a job security guarantee of three years.
[65]
Mr Brukwe of NUM was concerned that if the proposed mergers were
approved without a retrenchment moratorium, then the mergers
would
become the operational requirement necessitating the retrenchments.
He indicated that NUM supported a three-year moratorium
on all
retrenchments, but submitted that if this was not possible then
special emphasis should be placed on Patterson Grades A,
B and C (and
he emphasised that grade C should be included) because employees
in these bands constituted the vulnerable group.
Our
Assessment regarding the Employment Condition
[66]
We are of the view that the 24-month period is sufficient,
particularly because it will only begin to run from the date of
implementation of the mergers. It appears that the date of
implementation of the proposed consolidation of he Kroondaal and
Bathopele
mines would take place after the lapse of a fairly
considerable time following the merger approvals.
[67]
We are also of the view that the merging parties have shown that a
rational process was followed to arrive at the determination
of the
number of jobs that could be lost. We are mindful of the difficulties
of determining the number of potential retrenchments
at this stage.
Obviously, further and detailed investigations will be necessary
after the mergers are implemented and a process
of meaningful
consultations with the trade unions in terms of sections 189 and 189A
of the Labour Relations Act, 1995 (Act 66 of
1995) would need to
occur before any retrenchments took place. The investigative process
after the mergers and the consultation
process may result in a lower
number of retrenchments. It cannot result in more retrenchments in
the 24-month period after the
merger implementation dates than the
numbers imposed by the employment conditions.
[68]
From the documents referred to and the information and submissions of
the witnesses for the merging parties, it is apparent
that the public
interest in preventing employment loss because of the proposed
consolidation of the Kroondaal and Bathopele mines
is outweighed by a
countervailing public interest. The countervailing public interest is
the positive effects of the proposed mergers
upon the platinum mining
sector and the Rustenburg area and that it is likely that greater
employment in this sector and the Rustenburg
area will result from
the mergers, despite the potential losses arising from the possible
consolidation of the Kroondaal and Bathopele
mines.
BLACK
ECONOMIC EMPOWERMENT
[69]
The Commission indicated that it had received concerns from AMCU and
NUM
about the BEE procurement schemes for SMEs. They
were concerned that after the mergers the acquiring firms might not
continue with
these schemes.
[70]
In order to address this concern, the Commission proposed that a
condition be imposed obligating the merging parties to ensure
that
they maintained the BEE procurement policies currently in place.
AMCU's
Submission
[71]
Ms Freese submitted that to the extent that the current BEE
procurement practices exceeded the minimum requirements of the
Mining
Charter, the BEE procurement condition should be drafted in such a
way that the acquiring firms could not regress to the
minimums in the
Charter. This submission was made despite AMCU not being aware of the
target firms' current BEE procurement policies
and practices and how
many BEE companies were involved.
The
Merging Parties' Submissions
[72]
The merging parties opposed the Commission's and AMCU's proposals.
They proposed that they be obliged to ensure that the requirements
of
the Mining Charter be adhered to.
Our
Assessment
[73]
Having perused the provisions of the current Mining Charter, and
bearing in mind that the Mining Charter is reviewed every
five years,
we are of the view that the Mining Charter sufficiently addresses the
B
EE
and SME procurements concerns raised. Moreover, we are of the
view that it was inappropriate for the Commission to impose
conditions
or targets that exceeded those determined for the
industry.
[74]
In
addition, we are
apprehensive that the Commission's and AMCU's proposals are
impractical, as the current procurement policies and
practices in
place were not- known and it was unclear how they would be measured
and over what period they should-be determined.
CONCLUSION
[75]
Therefore, we are of the view that the proposed transaction is
unlikely to substantially prevent or lessen competition in the
relevant market. We agree with the Commission that the proposed
transaction does give rise to significant public interest concerns.
We therefore approve the merger subject to employment and BEE
procurement conditions attached hereto as Annexure A.
26
April 2016
DATE
____________________________
Mr
Anton Roskam
Mr
Norman Manoim and Ms Medi Mokuena concurring.
Tribunal
Researcher
...........
: Caroline
Sserufusa
For
the
Merging
Parties
...
:
Adv.
Cockrell instructed by
ENSafrica
and
Malan Scholes
Attorneys
For
the Commission
.......
: Adv. Wilson
instructed by Norton Rose Layne Quilliam and Kholiswa Mnisi
For
AMCU
......................
: Adv. Freese
instructed by Larry Dave Inc.
For
NUM
........................
:
Mr Brukwe
For
UASA
.......................
: Mr Van
Heerden
For
Solidariteit
................
: Mr
Schoeman
Annexure
A
Sibanye
Platinum Bermuda Proprietary-Limited and
Aquarius
Platinum Limited
CC
Case Number: 2015Nov0627
CT
Case Number: LM186Novfo
Conditions
1.
DEFINITIONS
The
following expressions shall bear the meaning assigned to them below
and cognate expressions bear a corresponding meaning:
1.1
"Acquiring Firm"
means Sibanye Platinum Bermuda
Limited ("BidCo");
1.2
"Affected
Employees"
means the 14
Non-Site Office Employees identified in the attached Annexure B;
1.3
"Approval Date"
means. the date referred to in the
Competition Tribunal's clearance certificate (Form CT 10);
1.4
"Aquarius"
means Aquarius Platinum Limited;
1.5
"'AQPSA"
means Aquarius Platinum (SA) Pty Ltd;
1.6
"Beneficiaries
of the Aquarius current BEE
procurement policy"
means SMEs currently benefiting from the
existing BEE procurement policy at AQPSA;
1.7
"Business
Day"
means any calendar day
which is not a Saturday, a Sunday or an official public holiday in
South Africa;
1.8
"Commission"
means the Competition Commission of
South Africa;
1.9
"
Competition
Act"
means
the
Competition Act 89 of 1998
, as amended;
1.10
"Conditions"
means these conditions;
1.11
"Implementation Date"
means the date, occurring
after the Approval Date, on which the Merger is implemented by the
Merging Parties;
1.12
"LRA"
means the Labour Relations Act No. 66 of 1995
(as amended);
1.13
"Merging Parties"
means BidCo and Aquarius;
1.14
"Merger"
means the amalgamation of BidCo and
Aquarius in accordance with the Bermuda Companies Act of 1981;
1.15
"Potential Consolidation"
means the possible
consolidation of certain activities between the Kroondal operation
(AQPSA) and the Bathopele Mine (part of the
Rustenburg Mines);
1.16
"Potential Consolidation Employees"
means those
employees defined in paragraph
1.16
of the conditions subject to which the Tribunal approved the
Rustenburg Mines Merger (as defined in paragraph 1.19 below);
1.17
"Rustenburg Mines"
means the division of
Rustenburg Platinum Limited being acquired by (ultimately) Sibanye
Gold in the Rustenburg Mines Merger;
1.18
"Rustenburg Mines
I
mplementation-Date"
means the date on which the Rustenburg Mines Merger is implemented;
1.19
"Rustenburg Mines
Merger"
means the
merger between Sibanye Rustenburg Platinum Mines Proprietary Limited
and the Rustenburg Mines that was conditionally
approved by the
Tribunal under Case Number LM178Nov15;
1.20
"Sibanye Gold"
means Sibanye Gold Limited, a company
which wholly owns BidCo;
1.21
"Target-Firm"
means Aquarius;
1.22
"Trade
Un
i
ons"
mean
United Association of South Africa ("UASA"), Association of
Mineworkers and Construction Union ("AMCU"),
National Union
of Mineworkers
("NUM")
and Solidarity Union;
and
1.23
"Tribunal"
means the Competition Tribunal of
South Africa.
2.
CONDITIONS TO THE APPROVAL
OF THE MERGER
2.1.
EMPLOYMENT
2.1.1.
The Merging Parties shall limit retrenchments to the Affected
Employees (i.e. the 14 (fourteen) Non-Site Office Employees
identified in Annexure B) and, subject to clause
2.1.2
below, shall ensure that there are no other retrenchments at the
Merging Parties' operations as a result of the Merger for
a period of
twenty four months (2 years) from the Implementation Date.
2.1.2.
In the event that the Potential Consolidation does in fact occur
within twenty four months (2 years) following the Rustenburg
Mines
Implementation Date, any retrenchments as a result of the Potential
Consolidation shall be limited to the Potential Consolidation
Employees.
2.1.3.
For the sake of clarity, retrenchments do not include (i) voluntary
separation arrangements; (ii) voluntary early retirement
packages,
(iii) unreasonable refusals to- be redeployed in accordance with foe
provisions of the LRA; (iv) resignations or retirements
in the
ordinary course of business; (v) retrenchments lawfully effected for
operational requirements unrelated to the Merger or
Potential
Consolidation; (vi) terminations in the ordinary course of business,
including but not limited to, dismissals as a result
of
misconduct
or poor performance; and (vii) any decision not to renew or extend a
contract of a contract worker.
2.2.
BEE PROCUREMENT POLICY
2.2.1.
The Merging Parties shall ensure that the BEE procurement policy
currently in place at AQPSA continues to comply with the
requirements
as set out in the Mining Charter as determined from time to time.
3.
MONITORING OF COMPLIANCE WITH THE CONDITIONS
3.1.
The Merging Parties shall circulate a copy of the Conditions ta all
its employees and their relevant Trade Unions and/or employee
representatives within 5 (five) business days of the Approval Date.
3.2.
The Merging Parties shall circulate a copy of the Conditions-to the
Beneficiaries of the Aquarius current BEE procurement policy
within 5
(five) business days of the Approval Date.
3.3.
As proof of compliance with 3.1 and 3.2 above, a senior official of
the Merging Parties shall within 10 (ten) business days
of
circulating the Conditions, submit an affidavit attesting to the
circulation of the Conditions and provide a copy of the notice
that
was sent to all employees and-the Beneficiaries of the Aquarius
current BEE procurement policy.
3.4.
The Merging Parties shall inform the Commission of the Implementation
Date within five
(5)
days of its occurrence.
3.5.
Any employee and/or Beneficiary of the Aquarius current BEE
procurement policy who believes that his/her employment and/or
contract with the Merging Parties has been terminated in
contravention of the Conditions may approach the Commission with-his
or her complaint.
3.6The
Acquiring Firm shall submit an affidavit (deposed to by a senior
official of the Acquiring Firm) on each anniversary of the
Implementation Date, confirming compliance with clause
of
the
Conditions for the
duration
of the
Conditions
(
determined
with
reference
to clause
2.1.1
above).
3.7The
Merging
Parties shall
be
entitled,
upon good
cause shown, to
apply to
the
Tribunal
for a
waiver, relaxation, modification and/or substitution
of one or
more of the Conditions.
GENERAL
All
correspondences
in relation
to these
conditions
must be
submitted to the following e-
mail
address:
mergerconditions@compcom.co.
za.
ANNEXURE
B
Table
4: A summary of employees likely to be affected by the Merger in
South Africa
Location
Likely
to be Affected
Position
Category
Reason
Non-site
office employees
14
“
Patterson
C grade and above”
Chief Executive Officer, Managing Director, Secretary/Legal
Counsel, Environmental Manager, Mining Titles Administrator,
office secretary, Payroll Supervisor, a secretary and 6 payroll
clerks
Due
to duplication in jobs as a result of the merger
Annexure
A
Sibanye
Rustenburg Platinum Mines Proprietary-Limited
and
The
Rustenburg Mines (a division of Rustenburg Platinum Mines Limited)
CC
Case Number: 2015Nov0625
CT
Case Number: LM178Nov15
Conditions
1.
DEFINITIONS
The
following expressions shall bear the meaning assigned to them below
and cognate expressions bear a corresponding meaning;
1.1
"Acquiri
n
g
Firm"
means
Sibanye Rustenburg Platinum Mines Proprietary Limited ("Sibanye
Rustenburg");
1.2
"Affected Employees"
means up to 250 employees
falling within Patterson Grade C and above, provided that this is. as
a result of a duplication arising
from the merger ;
1.3
"Approval
Date"
means the date
referred to in the Competition Tribunal's clearance certificate (Form
CT 10);
1.4
"Aquarius"
means Aquarius Platinum Limited, the
target firm being acquired by Sibanye Platinum Bermuda Proprietary
Limited in a merger transaction
filed with the Commission under case
number 20t5Nov0627;
1.5
"AQPSA"
means Aquarius Platinum (SA) Ply Ltd,
Aquarius' operative entity in South Africa which controls,
inter
alia, what is known as the "Kroondal operation";
1.6
"Beneficiaries
of the
Rustenburg
Mines”
current BEE procurement policy" means
SMEs currently benefiting from the existing BEE procurement policy at
the Rustenburg
Mines;
1.7
"Business
Day"
means any
calendar day which is not a Saturday, a Sunday or an official public
holiday in South Africa;
1.8
"Commission"
means the Competition Commission of
South Africa;
1.9
"
Competition Act"
means
the
Competition Act 89 of
1998
, as amended;
1.10
"Conditions"
mean these conditions;
1.11
"Implementation Date"
means the date, occurring
after the-Approval Date, on which the Merger is implemented by the
Merging Parties;
1.12
"LRA"
means the Labour Relations Act No.
66 of 1995 (as amended);
1.13
"Merging
Parties"
means Sibanye
Rustenburg and Rustenburg Mines;
1.14
"Merger"
means the acquisition of the Rustenburg
Mines by Sibanye Rustenburg;
1.15
"Potential Consolidation"
means the possible
consolidation of certain activities between the Bathopele Mine (part
of the Rustenburg Mines) and the Kroondal
operation (AQPSA);
1.16
"Potential
Consolidation Employees"
means 260 employees, comprising of 140 persons within Paterson Grade
C and above-and 120 persons in Paterson Grade A and B that
may
potentially be affected should the Potential Consolidation in fact
take place;-
1.17
"Ruste
n
burg
Mines"
means
the Rustenburg mining and concentrating complex division of
Rustenburg Platinum Limited, comprising the Bathopele, Siphumelele
and Thembelani mining operations, two concentrating plants, an
on-site chrome recovery plant and the Western Tailings Retreatment
plant and associated surface infrastructure and related employees,
assets and liabilities;
1.18
"Sibanye Gold"
means Sibanye Gold Limited, a company
which wholly owns Sibanye Rustenburg;
1.19
"Trade
U
n
i
ons"
mean
United Association of South Africa ("UASA"), Association of
Mineworkers and Construction Union ("AMCU"),
National-Union
of Mineworkers ("NUM") and Solidarity Union; and
1.20
"Tribunal"
means the Competition Tribunal of South
Africa.
2.
CONDITIONS TO THE APPROVAL
OF THE MERGER
2.1.
EMPLOYMENT
2.1.1.
The Merging Parties shall limit retrenchments to the Affected
Employees (identified in Annexure 8) and, subject to clause
2.1.2
below, shall ensure that there-are no other retrenchments at the
Merging Parties' operations as a result of the Merger for
a period of
twenty four months (2 years} from the-Implementation Date.
2.1.2.
In the event that the Potential Consolidation does in fact occur
within twenty four months (2 years} following the Implementation
Date, any retrenchments as a result of the Potential Consolidation
shall be limited to the Potential Consolidation Employees (i.e.
260
Employees, being 140 persons in Paterson Grade C and above and 120
persons in Paterson Grade A and 8).
2.1.3.
For the sake of clarity, retrenchments do not include (i) voluntary
separation arrangements; (ii} volw1tary early retirement
packages,
(iii) unreasonable refusals to be redeployed in accordance with the
provisions of the LRA; (iv) resignations or retirements
in the
ordinary course of business; (v) retrenchments lawfully effected. for
operational requirements unrelated to the Merger or
Potential
Consolidation; (vi) terminations in the ordinary course of business,
including but not limited to, dismissals as a result
of misconduct or
poor performance; and (vii) any decision not to renew or extend a
contract of a contract worker.
2.2.
BEE PROCUREMENT
POLICY
The
Merging Parties shall ensure that the BEE procurement policy
currently in- place at the Rustenburg Mines continues to comply
with
the requirements as set out in the Mining Charter as determined from
time to time
MONI
T
-ORING
OF COMPLIANCE WITH THE CONDITIONS
3.1
The Merging Parties shall circulate (by way of, for example, a
newsletter or notices posted on noticeboards) a copy of the
Conditions to all its employees and their relevant Trade Unions
and/or employee representatives within 5 (five) business days of
the
Approval Date.
3.2
The Merging Parties shall circulate a copy of the Conditions to the
Beneficiaries of the Rustenburg Mines' current BEE procurement
policy
within 5 (five) business days of the Approval Date.
3.3
As proof of compliance with 3.1 and 3.2 above, a senior official of
the Merging Parties shall within 10 (ten) business days
of
circulating the Conditions, submit an affidavit attesting to the
circulation of the Conditions and provide a copy of the notice
that
was sent to the Affected Employees and Beneficiaries of the
Rustenburg Mines current BEE procurement policy.
3.4
The Merging Parties shall inform the Commission of the Implementation
Date within five days of its occurrence
3.5
Any employee and for Beneficiary of the Rustenburg Mines' current BEE
procurement policy who believes that his/her employment
and for
contract with the Merging Parties has been terminated .in
contravention of the Conditions may approach the Commission with
his.
or her complaint.
3.6
The Acquiring Firm shall submit an affidavit (deposed to by a senior
official of the Acquiring Firm) on each anniversary of
the
Implementation Date, confirming compliance with clause and 2.1.2 of
the Conditions for the duration of the Conditions (determined
with
reference to clauses 2.1.1 and 2.1.2 above).
3.7
The Merging Parties shall be entitled, upon good cause shown,lo apply
to the Tribunal for a waiver, relaxation, modification
and/or
substitution of one or more of the Conditions.
4.
GENERAL
All
correspondences
in
relation
to
these
conditions
must be submitted
to
the
following
e-mail
address:
mergercondi
tions@compcom.co.za
.
Annexure
B
Table
1: Employees likely to be retrenched based on the merging parties'
submissions
Level
Position
Category
Reason
Likely
Affected
This
includes position such as: Employee Benefits Administrators,
Senior Petrol person, Assistant Public Health Officer, Senior
Administrator Document Control, Junior Buyer, Liquor Outlet
Superintendent, Senior Accountant Capital Assistant Accountant,
Business Improvement Coach, Single Accommodation Kitchen
Supervisor, HR Assistant Operations, Senior Human Resources
Assistant, HRD Instructor Dogs, Protection Services Control Room
Operator, Resource Geologist, HRD Manager Mining, planning
Analyst, Senior Manager Operations Finance, Principal Rock
Engineer, Assistant Mining Engineer, HR Assistant Shaft
Underground
etc.
Possible
Patterson Grade C and above jobs impacted as a result of
duplication of jobs arising from the Merger
200-250
[1]
Metropolitan Holdings Ltd and Momentum Group Lid (Competition Case
No. 41/LM/Jul10).