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Community's attempt to overturn Sibanye, Lonmin merger dismissed by court

The Constitutional Court of South Africa dismissed an application brought by the Greater Lonmin Community, representing communities in the Rustenburg area, to have Sibanye Gold Ltd.'s acquisition of platinum miner Lonmin PLC set aside, the mining company said in a statement on Sept. 5.

Sibanye said the court had dismissed, without costs, the application for leave to appeal because it has no reasonable prospects of success. The application for direct access to the court was also dismissed, on the grounds that the community had not made a case that was sufficiently in the interests of justice.

The Greater Lonmin Community had applied to the Constitutional Court to overturn the merger, saying it was approved by competition authorities without a proper investigation and complete documents as required by law, according to a report by African News Agency.

Sibanye announced in November 2018 that it secured approval from the South African Competition Tribunal for the Lonmin acquisition after outlining an all-share offer in December 2017. To secure the approval, the company agreed not to instigate any job losses over the first six months after closing. The Association of Mineworkers and Construction Union, the majority union in the platinum sector, took the decision on appeal to the Competition Appeal Court on a number of grounds including ongoing concerns about job losses. The appeal court upheld the Tribunal's decision in May this year.

At the time Sibanye said that without a merger, Lonmin could cease to operate despite improved platinum group metals prices, which influenced its strong fiscal fourth quarter results, and despite a metals purchasing agreement with Jiangxi Copper Co. Ltd. unit Pangaea Investment Management, which advanced US$200 million to Lonmin, US$150 million of which was used to repay lenders.

Sibanye CEO Neal Froneman, in the statement, welcomed the Constitutional Court's decision, saying they were committed to ongoing engagement with the community and to deliver Lonmin's Social and Labor Plan. He said the company was also committed to complying with the merger conditions, which included a six-month moratorium on retrenchments.