OPERATIONS at Rosh Pinah zinc mine are going ahead unabated following an agreement reached on Monday between global mining giant Glencore and Trevali mining corporation for Trevali to purchase Glencore’s 80% stake in the mine.
In an email response yesterday, Glencore said it was business as usual at the mine, and that operations will continue unchanged.
Glencore’s media officer, Charles Watenphul, told The Namibian yesterday that “the definitive agreement that was reached Monday in Canada is made to create the first pure play zinc investment vehicle in the market by affording external investors the opportunity to obtain zinc exposure through Trevali share listing on the Toronto Stock Exchange”.
Asked whether the purchase agreement had been submitted for approval to the Namibian Competition Commission (NaCC) yet, Watenphul said: “The agreement is subject to customary approvals, including the Namibian Competition Commission, and is expected to close in July 2017”.
However, NaCC spokesperson Dina Gowases told The Namibian on Wednesday that the transaction had not been officially lodged with them. She said for a transaction to be brought to the commission, it should meet certain merger thresholds.
Gowases said only if any of the combined values was more than N$30 million, and either the assets or the turnover of the transferred entity was more than N$15 million would the transaction qualify for NaCC assessment.
“Should the proposed transaction be notified to the commission, the commission will consider the merger notification in terms of section 47 of the Competition Act, and within the set time periods prescribed by the act,” she said. The Rosh Pinah transaction is valued way above the NaCC’s stipulated thresholds.
The Monday statement reads that the value of the transaction would be US$400 million (N$5,3 billion), of which US$244 million (N$3,2 billion) is to be paid in cash, with the remaining US$156 million (N$2,1 billion) to be paid by Trevali through the issuance of 175 million shares.
Trevali would also pay Glencore US$30 million (N$399 million) to clear an existing debt, Glencore said in the statement.
The purchase agreement also states that Trevali will buy Glencore’s 90% interest in the Perkoa mine in Burkina Faso.
According to section 47 of the Competition Act, the NaCC could base its determination of a proposed merger on any criteria which are considered relevant to the circumstances of the proposed merger.
These circumstances include the extent to which the proposed merger would be likely to prevent or lessen competition, or restrict trade or the provision of any service, or to endanger the continuity of supplies or services.
Source: The Namibian