
Sibanye’s acquisition of platinum miner Lonmin has hit another roadblock as the Association of Mineworkers and Construction Union petitions the South African Competition Tribunal to stop the takeover from coming to fruition.
The Association of Mineworkers and Construction Union (AMCU) went to the South African Competition Tribunal on Monday (November 12) to stop Sibanye-Stillwater’s (NYSE:SBGL,JSE:SGL) purchase of platinum miner Lonmin (LSE:LMI), claiming drastic job cuts as the reason.
Lonmin has already cut 2,000 jobs thanks to a lag in platinum prices and if the acquisition goes through, there are another 12,459 job cuts on the line over the course of the next three years.
In a submission to the Tribunal, the AMCU addressed the ramifications of the planned cuts and stated that they, “warrant that the transaction be prohibited.”
The union also noted that the outlook for platinum group metals (PGMs) is now positive and when that is coupled with the current weakened rand, it is possible that Lonmin would be able to operate profitably.
Lomin revealed that if the merger was not to take place, the miner would require US$450-million to US$500-million in order to remain in operation.
At the tribunal meeting, CFO Barrie van der Merwe claimed that the company is not in a position to return to the market to raise more capital in order to obtain the amount needed to stay in business.
“The chances that the company runs out of cash in the next 18 months is a reality,” he said.
In September, the tribunal approved Sibanye’s acquisition of Lomin on the condition that Sibanye made attempts to save about 3,700 jobs if platinum prices improve and the company can maintain production costs at certain shafts.
Following the ruling, Neal Froneman, CEO of Sibanye, stated, “[t]he positive recommendation by the commission to the tribunal is pleasing and on terms which we believe are fair, reasonable and in the best interest of all stakeholders.”
“We are confident that this transaction will not only bring greater stability to these assets and ensure a more sustainable and positive future, but also demonstrate Sibanye-Stillwater’s commitment to the South African mining sector,” he added.
Froneman also noted that the deal will create a “more robust business, better able to withstand volatile PGM prices and exchange rates.”
The tribunal is expected to make a final ruling of the acquisition on Wednesday (November 14).
Following the first part of the tribunal hearing, New York-listed Sibanye-Stillwater was down 0.22 percent, trading at US$2.30 as of 1:31 p.m. EST on Tuesday (November 13). Meanwhile, London-listed Lonmin was down 6.29 percent, trading at GBX 41.14.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
MARKETS
COMMODITIES
Commodities | |||
---|---|---|---|
Gold | 1853.48 | +0.45 | |
Silver | 22.12 | +0.03 | |
Copper | 4.32 | +0.06 | |
Palladium | 2076.57 | +13.05 | |
Platinum | 957.08 | +2.92 | |
Oil | 115.07 | +0.98 | |
Heating Oil | 3.90 | +0.05 | |
Natural Gas | 8.71 | -0.19 |
DOWNLOAD FREE REPORTS
BROWSE COMPANIES BY SECTOR
- Agriculture Investing
- Phosphate Investing
- Potash Investing
- Base Metals Investing
- Copper Investing
- Iron Investing
- Lead Investing
- Nickel Investing
- Zinc Investing
- Battery Metals Investing
- Cobalt Investing
- Graphite Investing
- Lithium Investing
- Manganese Investing
- Vanadium Investing
- Critical Metals Investing
- Magnesium Investing
- Rare Earth Investing
- Scandium Investing
- Tantalum Investing
- Tellurium Investing
- Tungsten Investing
- Energy Investing
- Oil and Gas Investing
- Uranium Investing
- Gem Investing
- Diamond Investing
- Industrial Metals Investing
- Aluminum Investing
- Chromium Investing
- Coal Investing
- Molybdenum Investing
- Tin Investing
- Precious Metals Investing
- Gold Investing
- Palladium Investing
- Platinum Investing
- Silver Investing
- 3D Printing Investing
- Bitcoin Investing
- Blockchain Investing
- Cleantech Investing
- Cloud Investing
- Cryptocurrencies
- Data Investing
- Emerging Tech Investing
- Artificial Intelligence Investing
- Mobile Investing
- Robotics Investing
- Fintech Investing
- Gaming Investing
- Esports Investing
- Nanoscience Investing
- Graphene Investing
- Nanotech Investing
- Security Investing
Featured stocks
Investing News Network websites or approved third-party tools use cookies. Please refer to the cookie policy for collected data, privacy and GDPR compliance. By continuing to browse the site, you agree to our use of cookies.