Pamodzi Gold Ltd v President Steyn Gold Mines(Free State)(Pty)Ltd (110/LM/OCT07) [2007] ZACT 107 (9 November 2007)

Pamodzi Gold Ltd v President Steyn Gold Mines(Free State)(Pty)Ltd (110/LM/OCT07) [2007] ZACT 107 (9 November 2007)

The Tribunal found that the combined post-merger market share of Pamodzi Gold and PSGM would be insignificant, with an accretion of less than 1%, and that larger competitors remain active in the market. The objection by Virgile Mining was dismissed as it did not own any gold mining assets and its concerns about foreclosure were unfounded, given the availability of other processing facilities. The Tribunal held that the transaction would not negatively impact public interest; instead, it would preserve jobs and maintain production in a distressed region. The Tribunal reiterated that it is not empowered to dictate the choice of purchaser, provided the transaction does not contravene the...

Citation
[2007] ZACT 107
Parties
Applicant: Pamodzi Gold Ltd; Respondent: President Steyn Gold Mines (Free State) (Pty) Ltd; Respondent: Virgile Mining Contractors (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
9 November 2007
Case Number
110/LM/OCT07
Procedural Posture
Merger Application / Decision
Outcome
Merger approved unconditionally.
Judges
DH Lewis, N Manoim, U Bhoola
Legal Topics
Merger Control, Public Interest Considerations, Market Share Analysis, Black Economic Empowerment
Competition Law Commercial and Corporate Merger Control Public Interest Considerations Market Share Analysis Black Economic Empowerment

Case Brief

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Parties

Pamodzi Gold Ltd

Applicant

President Steyn Gold Mines (Free State) (Pty) Ltd

Respondent

Virgile Mining Contractors (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Decision

Legal Issues

  1. 1 Whether the proposed merger is likely to substantially prevent or lessen competition in the gold production market.
  2. 2 Whether the merger raises any public interest concerns under the Competition Act.
  3. 3 Whether the objections raised by Virgile Mining Contractors warrant prohibition or conditions on the merger.

Ratio Decidendi

The Tribunal found that the combined post-merger market share of Pamodzi Gold and PSGM would be insignificant, with an accretion of less than 1%, and that larger competitors remain active in the market. The objection by Virgile Mining was dismissed as it did not own any gold mining assets and its concerns about foreclosure were unfounded, given the availability of other processing facilities. The Tribunal held that the transaction would not negatively impact public interest; instead, it would preserve jobs and maintain production in a distressed region. The Tribunal reiterated that it is not empowered to dictate the choice of purchaser, provided the transaction does not contravene the...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Pamodzi Gold Ltd and President Steyn Gold Mines (Free State) (Pty) Ltd is approved without conditions.