Miners Impala Platinum and Royal Bafokeng Platinum have accused competitor Northam Platinum of delaying their planned merger by seeking to be included in the deal’s approval hearings.
The pair says Northam has no legal standing to intervene in the process but is trying to do so under the guise of assistance to the competition authorities when it is acting to protect its own interests.
Both Implats and Northam have been increasing their shareholding in RBPlat since late 2021, as a way to expand, while mining firms slow investment in new SA mines amid regulatory uncertainty and red tape.
In November, Implats offered R150 a share for all of RBPlat, in which it has steadily increased its ownership to 37.83%. Northam’s shareholding of RBPlat is now 34.95%, allowing it to just avoid the 35% threshold that would require it to make a buyout offer, which it may still do.
The merger was recommended by the Competition Commission in April and now needs to be approved by the Competition Tribunal, which acts as a court in competition issues.
Northam must convince the tribunal it qualifies to be involved in the hearing process by showing it will be materially affected by the proposed deal.
Acting jointly for RBPlat and Implats, Tembeka Ngcukaitobi said Northam does not meet the legal test for intervention.
“Northam’s own rights are not impacted by the merger. The tribunal should not allow a busybody to intervene when its own interests are not at stake.”
Northam is a customer of Implats, which processes its ore, and it insists that it is therefore also affected.
Ngcukaitobi accused Northam of delaying a “time-sensitive” buyout process with an application that has already added a month’s delay in a deal that needs to be concluded by August 8.
“The name of the game is delay, delay, delay delay,” he said, adding that Northam has “financing problems” that are preventing it from making a counter-offer for RBPlat.
Representing Northam, advocate Michelle le Roux said Implats should not rush the tribunal into endorsing a permanent structural change in the platinum market. Once RBPlat is sold, “the SA market on this limited resource will forever be changed”.
She told the tribunal that Northam could be of assistance by providing evidence on six matters. The commission erred in defining the ore processing market as a global one when initial ore processing is done locally, she said. Thus Northam had to intervene to correct the commission’s facts.
Junior miners pay the big platinum miners — Implats, Amplats and Sibanye-Stillwater — for smelting services, a process which uses heat to extract ore from rock. Northam said if RBPlat is taken over by Implats, there will be fewer smelting services and junior miners may face higher prices as competition wanes. The commission failed to take this into account.
Implats denies a merger will reduce smelting processing capacity and said Northam is not qualified to speak for junior miners at the tribunal.
Northam asked the tribunal for more details on contracts between junior miners and Implats in order to prove how the merger would affect the prices of processing services.
Ngcukaitobi said Northam is using the process to gain access to confidential information from competitors, and this move could delay the deal by up to six months.
“They want everything related and unrelated to the interest they purport to be protecting and [say] ‘give us everything confidential ... nonconfidential’. They have put in no limitations.”
He said its request for confidential documents is inconsistent with a genuine desire to assist the tribunal, showing that Northam is protecting its own commercial interests.
Implats said if the merger goes ahead, it will move from having a 17% stake in platinum group metal mining to 20%, a difference that Ngcukaitobi said will not lessen competition.
To sweeten the deal, Implats has offered workers shares in the company. The competition authorities are legally obliged to assess how mergers affect black ownership and workers before approving buyouts.
Northam wants to query the ownership details of the employee shareholding scheme.
Implats said Northam has no grounds to query the scheme and is acting against the interest of workers.
Judgment on whether Northam can intervene was reserved.
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