Commission approves Cheetah Chrome’s acquisition of DCM
The Competition Commission has approved the proposed merger whereby Cheetah Chrome South Africa intends to acquire Dilokong Chrome Mine (DCM), with conditions.
Cheetah is a special purpose vehicle incorporated for the purposes of the proposed transaction and is controlled by Xinganglian Mettalurgical (XGL).
XGL is a Chinese ferrochrome product buyer and imports chrome ore from various countries for processing.
DCM is a South African chrome ore mining company. Its operations consist of the Hanekom Shaft, an existing beneficiation plant and ancillary activities, as well as the TMT Shaft.
The commission found that the proposed transaction was unlikely to result in a substantial prevention or lessening of competition in any relevant markets.
It further determined that the proposed transaction had positive public interest outcomes.
The merging parties have made certain undertakings in relation to employment, continued procurement from businesses owned by historically disadvantaged individuals (HDIs) and increasing the HDI ownership of DCM.
To ensure the merging parties implement these undertakings, the commission imposed a number of conditions.
These include that Cheetah must hire no fewer than 1 600 employees at DCM within a period of ten years post the implementation of the transaction; that the HDIs, including local communities, shall have a combined 30% shareholding in DCM; and that DCM shall continue to procure services from small and medium-sized businesses owned by HDIs.
Moreover, DCM must beneficiate the chrome ore locally. The commission indicated that beneficiation in this context meant that chrome ore be crushed, screened and processed and converted into chromite.
Lastly, if the Department of Mineral Resources and Energy approves Cheetah’s Section 11 mining rights application, DCM shall comply with all conditions imposed, including but not limited to its social labour plan.
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