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THE Competition Commission has approved without conditions the merger between Samancor Chrome, International Ferro Metals SA, and Sky Chrome Mining.
It found last week that such a merger was unlikely to materially affect competition in any related metals markets.
The tie-up comes as SA’s metals industry lurches from crisis to crisis on exceptionally poor global demand for minerals commodities and extremely low prices.
Samancor, controlled by Samancor Chrome Holdings, is the primary acquiring firm, according to a merger notice posted in late March. It will buy the ferrochrome assets of International Ferro Metals (SA), and also the mining assets of both International Ferro Metals (SA) and Sky Chrome Mining, including those that are non-operational.
International Ferro Metals, incorporated in Australia also controls Purity Metals Holdings of Switzerland, which in turn controls Sky Chrome. The company said disposal to a third party was the only way it could survive.
Samancor Chrome said the rationale for the acquisitions was that it produced more chrome ore than its furnaces could process, and it was selling surplus ore production mainly as exports. It said buying International Ferro Metal SA’s furnaces "could lead to better optimisation" of its operations.
In February, Samancor Chrome announced in a section 189 notice that it would begin a retrenchment process at all three of its smelters in Emalahleni, Middelburg and Steelport. Trade union Solidarity said 280 employees would be affected by this.
Samancor Chrome was sold by majority shareholders BHP Billiton and Anglo American in 2005, leaving manganese assets called Samancor Manganese under BHP Billiton-Anglo American joint ownership at the time. BHP Billiton's share was later bundled into South32.
But as a measure of how poor conditions in the metals industry generally are, Samancor Manganese -- a separate company for the past 10 years -- also issued a section 189 notice late last year about a major restructuring process that would soon begin at its Metalloys plant near Johannesburg. This would affect an estimated 500 jobs.
The plant is one of the largest smelters in the world, producing high-carbon ferromanganese and medium-carbon ferromanganese alloy, used in stainless steel and hi-tech engineering products.
(This story was changed to distinguish between Samancor Chrome and Samancor Manganese as separately owned companies)
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- [Editor:sunzhichao]
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