Commission approves NBC, ECM merger without conditions
The Competition Commission has approved the proposed transaction, whereby newly-incorporated company North Block Complex (NBC) intends to acquire Exxaro Coal Mpumalanga (ECM) in respect of its mining and processing business, the transferred business, without conditions.
The transferred business, an opencast mine in Mpumalanga which produces thermal coal, will be bought by Universal Coal through NBC, its 49%-owned subsidiary, for about R172-million.
NBC has achieved run-of-mine production of about 3.5-million tonnes a year over the past four years with sales of some 2.7-million tonnes a year.
The coal produced is predominantly used for power generation and, over the years, has been primarily produced for sale to the domestic market.
State-owned Eskom, whose Arnot, Tutuka and Komati power stations are supplied by NBC, has asked of suppliers that they be 51% black-owned.
The transaction is unlikely to prevent or lessen competition in any market in South Africa, the commission found.
Universal Coal has said it plans to convert the NBC into a multiproduct operation after including the adjacent Paardeplaats project.
The acquisition is expected to be finalised towards the end of this year.
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