Business Day
*Eskom to intervene on Xstrata*** *Amanda Visser, Business Day, Johannesburg, 7 December 2012*ESKOM and the National Union of Metalworkers of South Africa (Numsa) have been granted the right to intervene in the Competition Tribunal's hearings next week on the merger of the world's largest commodity trader, Glencore, and mining group Xstrata.
Eskom has asked that the details of its intervention remain confidential, but it is likely that it would use the platform to once again express concerns about the supply and price of coal supplied to its power stations.
The company did not respond to requests for comment on Thursday, but it said recently it was seeking a "pact" with the coal industry to limit future increases to the inflation rate.
Xstrata is the world's largest exporter of the type of coal used by power stations and all of its mines and plants are in South Africa.
Glencore holds almost 34% of Xstrata and after this transaction --- valued at $80bn --- is approved, the miner will become a wholly owned subsidiary of Glencore.
It currently produces 27.4-million tons of saleable coal a year in South Africa, of which almost 30% is exported.
Glencore and its partners have invested R9.3bn in South African coal assets since the incorporation of Shanduka Coal in 2005. Its coal assets in South Africa include Optimum Coal, Shanduka Coal, Umcebo Mining and Kangra Coal.
The merger of the two giants is being assessed by competition authorities around the world, including the European Union, the US and China. The companies have received unconditional approvals for the merger in seven countries, including Canada, Japan and Brazil.
The Competition Commission has recommended the conditional approval of the merger, mainly due to public interest concerns. It said on Thursday that the deal was unlikely to substantially lessen competition.
The commission was, however, concerned about job losses and recommended that the merger be approved on condition that retrenchments be limited to a maximum of 180 employees.
It proposed a moratorium of two years on retrenchments after the approval of the merger, and that a training fund be established for affected employees.
Numsa was granted leave to intervene at the tribunal on public interest grounds.
The union also expressed concern about possible job losses if companies were forced to close due to Eskom being unable to supply sufficient electricity, or if it had to increase electricity prices because of a shortage of coal.
Numsa initially sought additional conditions regarding retrenchments at a Glencore subsidiary, Silicon Technology. The union wanted to ensure the re-employment of workers who had recently been retrenched, but has decided not to pursue the matter at the tribunal.
Glencore and Xstrata's shareholders approved the proposed merger at the end of last month.
*From: http://www.bdlive.co.za/business/mining/2012/12/07/eskom-to-intervene-on-xstrata*
** -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] .
<<inline: BusinessDay.gif>>
