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Competition Tribunal approves Harmony-AngloGold transaction

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Competition Tribunal approves Harmony-AngloGold transaction

Mponeng Gold Mine.

30th April 2020

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) – The Competition Tribunal has unconditionally approved Harmony Gold’s acquisition of Mponeng gold mine, other assets and other related liabilities from AngloGold Ashanti.

The purchase price includes $200-million in cash, plus a deferred payment of up to $100-million. As Mining Weekly has reported, the deferred payment will include $260/oz payable on all underground production sourced within the West Wits mineral rights, comprising the Mponeng, Savuka and TauTona mines, in excess of 250 000 oz/y for six years from January 1, 2021.

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A further deferred payment of $20/oz is payable for underground production from the West Wits mineral rights below the current infrastructure, if it is developed.

AngloGold last year decided to dispose of its last remaining South African assets, principally comprising the Mponeng underground mine, where further capital, necessary to extend the mine life was in competition with other, higher-return AngloGold Ashanti priorities; Mine Waste Solutions (MWS), the mine waste retreatment operation; and a surface rock dump processing business.

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For Harmony, the acquisition follows its purchase of Moab Khotsong from AngloGold in 2018.

Besides Mponeng mine and its associated assets and liabilities, the transaction takes in the TauTona and Savuka mines and associated rock-dump and tailings storage facility reclamation sites, mine rehabilitation and closure activities located in the West Wits region and their associated assets and liabilities; First Uranium, which owns MWS and Chemwes, as well as associated tailings assets and liabilities; Covalent Water Company, AngloGold Security Services and Masakhisane Investments; and certain rock-dump reclamation, mine rehabilitation and closure activities located in the Vaal river region and their associated assets and liabilities.

AngloGold would retain its interest in Rand Refinery, as well as its obligations relating to the post-retirement medical cost for its applicable retired and remaining employees and its obligations under the Silicosis Class Action Settlement Agreement.

Harmony Gold conducts gold mining and exploration in mines in South Africa and primarily produces gold. Silver and uranium are by-products of its gold production. Of relevance to this transaction are Harmony Gold’s wholly owned subsidiaries, Harmony Moab and Golden Core, the tribunal stated in a release to Mining Weekly.

The tribunal added that AngloGold was not controlled by any firm. Of relevance to this transaction were AngloGold’s wholly owned firms and assets grouped into two “packages”, the West Wits package comprising shares in and claims against three Gauteng mines, Water Company, AGA Security Services and Masakhisane Investment, all proprietary companies. The Vaal Reef Package, it said, comprised shares in and claims against First Uranium, Chemwes and assets not bought in Harmony Moab’s 2018 acquisition of AngloGold’s Vaal River mining business comprising buildings, Kopanang Gold Plant and equipment.

The Competition Commission, which assesses large mergers before referring them to the tribunal for a decision, concluded the relevant market as being the international markets for the production and supply of gold and silver. A lessening of competition in either market was found to be unlikely.

In relation to public interest concerns, the merging parties undertook that there would be no merger-related retrenchments. The commission recommended that the proposed transaction be approved without conditions.

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