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In July 2012 the Competition Tribunal (Tribunal) approved the sale of a silica mine between rival companies, overturning the decision by the Competition Commission (Commission) to prohibit the merger. The SamQuartz mine is one of South Africa's primary producers of high-grade silica and a key supplier to the country's clear glass and metallurgical industries.
The Commission prohibited Thaba Cheu Mining Limited's (Thaba Cheu) ZAR259 million acquisition of the SamQuartz silica mine from Petmin. In its investigation the Commission found the acquisition would allow Thaba Cheu to exert power in both downstream and upstream markets, rendering the downstream competitors reliant on their direct competitor. In addition, it concluded that SamQuartz had no meaningful competition for high-quality silica production.
The Department of Trade and Industry also raised concerns that the sale would have ripple effects on the steel, ferrochrome and foundry industries.
The Tribunal agreed with the companies' assertions that long-standing supply agreements with competitors, and commitments to supply to new entrants, eased foreclosure concerns connected with the deal.
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