Tribunal prohibits Imerys’ buyout of Andalusite Resources
JOHANNESBURG (miningweekly.com) – The Competition Tribunal has prohibited industrial minerals processing company Imerys South Africa’s acquisition of mining company Andalusite Resources (AR).
The tribunal notes that the proposed acquisition will lead to a monopoly in the mining, processing and sale of andalusite in South Africa and also a near-monopoly in the global sale of andalusite.
Barriers to entry in the mining, processing and sale of andalusite in South Africa are high and there is no realistic prospect of new entry in the foreseeable future in this area.
The proposed transaction will reduce the number of participants in South Africa from two to one, resulting in a substantial prevention or lessening of competition.
The acquisition also raises significant public interest concerns, specifically from a small business and an industrial sector perspective.
The Competition Commission had also prohibited the proposed acquisition in April 2015.
Imerys and AR in May 2015 requested the tribunal to consider the merger and hearings were held over several months in 2015 and 2016, with the last submissions from the merging parties filed on August 24.
Although Imerys and AR had proposed certain behavioural conditions, the tribunal deemed these inadequate and impractical from a monitoring and compliance perspective.
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