Thaba Chueu Mining (Pty) Ltd and Another v Competition Commission of South Africa, In re: Thaba Chueu Mining (Pty) Ltd v Samquartz (Pty) Ltd (10/AM/Jan12) [2012] ZACT 95 (15 November 2012)

Thaba Chueu Mining (Pty) Ltd and Another v Competition Commission of South Africa, In re: Thaba Chueu Mining (Pty) Ltd v Samquartz (Pty) Ltd (10/AM/Jan12) [2012] ZACT 95 (15 November 2012)

The Tribunal found that the main competition concern—input foreclosure of Siltech and Sublime—was adequately addressed by the conclusion of comprehensive long-term supply agreements, which were the result of commercial bargaining and provided sufficient protection to the affected customers. Both Siltech and Sublime expressed satisfaction with the agreements and withdrew their interventions. The Tribunal further accepted undertakings by the merging parties to supply silica to new entrants on non-discriminatory terms, mitigating entry barrier concerns. The Commission's residual concerns regarding collusion, access to confidential information, enhanced bargaining power, and predation were...

Citation
[2012] ZACT 95
Parties
Applicant: Thaba Chueu Mining (Pty) Ltd; Applicant: Samquartz (Pty) Ltd; Respondent: Competition Commission of South Africa
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 November 2012
Case Number
10/AM/Jan12
Procedural Posture
Merger Control / Reasons for Decision Following Conditional Approval of Intermediate Merger
Outcome
Merger conditionally approved subject to supply obligations and non-discriminatory terms for new entrants.
Judges
Y Carrim, L Reyburn, T Madima
Legal Topics
Merger Control, Input Foreclosure, Vertical Integration, Supply Agreements, Barriers to Entry
Competition Law Commercial and Corporate Merger Control Input Foreclosure Vertical Integration Supply Agreements Barriers to Entry

Case Brief

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Parties

Thaba Chueu Mining (Pty) Ltd

Applicant

Samquartz (Pty) Ltd

Applicant

Competition Commission of South Africa

Respondent

Procedural Posture

Merger Control / Reasons for Decision Following Conditional Approval of Intermediate Merger

Legal Issues

  1. 1 Whether the proposed merger would result in significant input foreclosure in the silica market.
  2. 2 Whether the merger would facilitate anticompetitive co-ordination or collusion between local producers of ferrosilicon.
  3. 3 Whether the merger would raise barriers to entry in downstream markets for silicon metal and ferrosilicon.

Ratio Decidendi

The Tribunal found that the main competition concern—input foreclosure of Siltech and Sublime—was adequately addressed by the conclusion of comprehensive long-term supply agreements, which were the result of commercial bargaining and provided sufficient protection to the affected customers. Both Siltech and Sublime expressed satisfaction with the agreements and withdrew their interventions. The Tribunal further accepted undertakings by the merging parties to supply silica to new entrants on non-discriminatory terms, mitigating entry barrier concerns. The Commission's residual concerns regarding collusion, access to confidential information, enhanced bargaining power, and predation were...

Court Disposition

Merger conditionally approved subject to supply obligations and non-discriminatory terms for new entrants.

Orders

  • The merger is approved subject to the conditions set out in annexures A to E, including long-term supply agreements with Siltech and Sublime and non-discriminatory supply terms for new entrants.
  • No order as to costs.