JOHANNESBURG (Reuters) - South Africa’s Competition Tribunal on Wednesday approved Sibanye-Stillwater’s (SGLJ.J) takeover of troubled platinum producer Lonmin (LMI.L) (LONJ.J) but imposed a six-month moratorium on job cuts.
South Africa’s Sibanye has proposed to buy Lonmin for about 285 million pounds ($365 million) to create the world’s No. 2 platinum producer in a bid to ride out depressed prices for the metal.
“The public interest will be best served if a moratorium were placed on all retrenchments for a period of 6 months,” the Tribunal, which has the final say on deals, said in a statement.
Layoffs in South Africa are a politically sensitive issue and regulators have in the past placed caps on lay-offs as a condition of deals being approved. Unemployment in Africa’s most developed economy runs at around 28 percent.
“They took into account all stakeholders but ultimately this is the right decision for the region, for Lonmin’s assets and for the industry generally,” Sibanye’s spokesman James Wellsted said.
Lonmin CEO Ben Magara said in a statement that he believed consolidation was a way to find a “sustainable solution to the industry’s challenges”.
Association of Mineworkers and Construction Union (AMCU) president Joseph Mathunjwa, who previously said the union would consider mass action to oppose the takeover, could not immediately be reached for comment.
Lonmin, the world’s third biggest platinum producer, has burned through $1.6 billion in cash, which was raised from investors since platinum prices plunged 60 percent from their peak in 2008. But it has still struggled to fund its mines.
The Competition Commission, which has a mandate to protect employment as well as promote competition, in September recommended that the takeover be approved but imposed conditions to limit job losses.
Britain’s Competition and Markets Authority (CMA) in June unconditionally cleared the takeover.
The markets had closed when the Tribunal released its statement.
Additional reporting Patricia Aruo; Editing by James Macharia and David Evans