The takeover of platinum producer Lonmin by Sibanye-Stillwater was approved by South Africa’s Competition Commission. The Commission however imposed conditions to limit job losses. According to the Competition Commission, the transaction which is scheduled to close by the end of 2018, did not prevent or lessen competition in platinum markets but it raised “significant public interest concerns”.
To avoid the loss of over 3,000 jobs, Sibanye had to start three short term mining projects. The company also had to keep Lonmin’s existing contracts with black-owned suppliers and maintain Lonmin’s black ownership deal with the Bapo de Mogale community.
When the transaction was announced, Lonmin admitted it was running out of money and unveiled plans to cut 12,600 jobs. Sibanye and Lonmin admit the layoffs are necessary to save the rest of the 33,000 workers in Lonmin.
In an interview with Reuters, Sibanye’s Chief Executive said shareholders might not find the Lonmin deal attractive, if the Commission imposed tough conditions.
The Competition Tribunal, which makes the final ruling on deals, will decide whether to accept the Commission’s recommendations.