The Competition Tribunal has issued an order prohibiting the intermediate merger involving the sale of Sasol South Africa’s sodium cyanide business to a Czech Republic-based producer of sodium cyanide, Draslovka Holding, through its local subsidiary, Draslovka South Africa.
Sodium cyanide, a chemical compound commonly used in the extraction of precious metals like gold and silver, is an important input for the gold mining firms operating in South Africa. Sasol has a monopoly position in the production of liquid cyanide in South Africa and the gold mining sector is dependent on Sasol for the supply of liquid cyanide, according to the Competition Commission.
In terms of the proposed transaction, Sasol would have supplied certain key inputs required in the production of sodium cyanide to Draslovka.
The commission had earlier prohibited the transaction. Gold mining firms Sibanye-Stillwater and its subsidiary DRDGold Limited, Pan African Resources and Harmony Gold Mining Company had been granted leave to participate in the tribunal proceedings, following their applications for intervention. Ultimately, Sibanye and DRDGold intervened in the matter and the tribunal called on Pan African and Harmony to make submissions and answer questions.
The tribunal heard oral evidence from the merger parties, the commission and the intervenors, including factual and economic expert evidence during the merger hearing held in April and May. Thereafter, the parties made further written submissions to the tribunal, the last of which was received on October 2.
The tribunal intends to make the reasons for its decision public at a later stage.