JOHANNESBURG (miningweekly.com) – The Competition Tribunal has approved Glencore’s acquisition of BHP Billiton Energy Coal South Africa’s supply of export coal from Optimum colliery, with which Glencore has merged.
As Glencore holds less than 14% of the international thermal coal market, the tribunal found that the overlap raised no competition impediments.
It dismissed the concerns of both South Africa’s State-owned power utility Eskom and South African Breweries that Glencore would divert coal away from the domestic market to the higher-priced export market, finding that Optimum coal was already exported and that the only change post-merger was that Glencore would now export the coal and not BHP Billiton.
GlencoreXstrata CEO Ivan Glasenberg said after the company’s latest set of solid and high dividend results that the company’s share of the coal market did not raise any red flags from a competition authority viewpoint.
BHP Billiton, which runs the Khutala, Klipspruit, Middelburg and Wolvekrans collieries in South Africa, as well as three coal processing plants, has dismissed speculation that it is intent on disposing of its thermal coal assets.
Glencore, which supplies 20-million tons of thermal coal a year to Eskom, has four South African mining complexes, which produce 47.3-million tons a year, and three midtier operations, which produce 20.7-million tons a year.
Glencore, which owns 31.7% of the 91-million-ton-a-year Richards Bay Coal Terminal, sold 49-million tons of coal in 2012.
The 24-year-life, 920-employee Goedgevonden mining complex, where South Africa’s black-controlled African Rainbow Minerals is a partner, exports 44% of its coal and sells 56% into the local market.
The 17-year-life Optimum complex has 3 700 employees; the 22-year-life iMpunzi complex has 1 400 employees; and the 23-year-life Tweefontein nearly 3 000 employees.
Besides the midtier Middelburg complex with more than 2 000 employees, Umcebo with 2 200 employees and Koornfontein with nearly 2 000 employees, there is also a long list of coal projects that are under development.