The Tribunal has approved, subject to a range of public interest and competition-related conditions, the merger whereby IRL (South Africa) Resources Investments (Pty) Ltd (IRL) will acquire the movable and immovable assets of the Mapochs Mine (Pty) Ltd (Mapochs).
 
The Tribunal considered a set of proposed agreed conditions by the merger parties and intervenors in the transaction i.e. the Minister of Trade, Industry and Competition (the Minister) and EVRAZ Highveld Steel and Vanadium Ltd (Highveld). The conditions address their competition and public interest concerns relating to employment, local beneficiation and securing vanadium-ore supply, among others.
 
Following a virtual (online) hearing during which the merger parties and intervenors made submissions, the Tribunal has conditionally approved the merger. Below is a summary of the conditions: 
 
EMPLOYMENT
 
IRL, being the acquiring firm, will support the local community and work to create jobs at, and associated with, the Mapochs Mine. It commits to grow and improve the mining operations and to create employment opportunities throughout the supply chain associated with the mine in South Africa.
 
On the basis of an Ore Supply Agreement coming into effect, IRL will ensure a minimum of two hundred (200) direct employment opportunities and indirect employment opportunities within the Mapochs Mine and the surrounding area within three (3) years of the merger approval date. This minimum level of employment will be maintained, and where commercially feasible, enhanced throughout the operation of the mine.
 
INVESTMENT
 
IRL commits to invest in the Mapochs Mine, to ensure that it is expeditiously refurbished and becomes fully operational, and to develop resources associated with the mine. IRL will invest an additional amount of R160 million into the mine and associated infrastructure within three (3) years from the merger approval date. This is in addition to any purchase price or consideration paid and any amounts already paid or expended by IRL relating to the mine.
 
ORE SUPPLY AND AVAILABILITY
 
IRL confirms its willingness to sell the ore of the Mapochs Mine to local beneficiators i.e. Highveld or any future new entrants. An Ore Supply Agreement will be entered into and concluded with Highveld as a requirement for the approval of this merger. Among others, the agreement provides for guaranteed minimum volumes of ore to be supplied to Highveld, at a competitive price, as and when the mine becomes operational again.
 
The conditions also cater for the potential scenario where other domestic beneficiators of the ore enter the market. They will be supplied with ore on fair and reasonable terms after the volume commitments in terms of the Ore Supply Agreement have been met. IRL shall afford local beneficiators a right of first refusal to acquire ore from the Mapochs Mine and ensure that they are afforded reasonable and sufficient opportunity to access the ore and/or output of the Mapochs Mine.
 
However, IRL may establish and invest in its own local facilities and/or operations aimed at beneficiating the ore from the Mapochs Mine in South Africa.
 
BUSINESS / ACCOUNTS
 
Among others, IRL shall keep accessible records in relation to all sales events for at least five (5) years after any sales of ore have occurred.
 
MONITORING
 
The merger conditions are applicable for as long as IRL owns, controls or operates the Mapochs Mine. IRL will provide the Minister and the Competition Commission (the Commission) with a detailed report and affidavit regarding compliance with the conditions every six months for three years, and thereafter annually for another two years. The Minister and the Commission will also be entitled, among other entitlements, to request additional information from IRL for the monitoring of compliance with the conditions and shall be entitled to inspect the premises and accounts associated with the Mapochs Mine.
 
BACKGROUND
 
In July 2018, the Commission prohibited the transaction between the merger parties because it was concerned that the merger was likely to foreclose Vanchem Vanadium Products (Pty) Ltd (Vanchem) from sourcing vanadium-bearing ore from the Mapochs Mine. The merger parties subsequently applied to the Tribunal to have the Commission’s prohibition of the proposed merger reconsidered. First Vanchem, then the Minister, and then Highveld intervened in the merger.

Before the matter could be heard on its merits, Vanchem was ultimately purchased by Bushveld Minerals Ltd and its concerns about supply of vanadium from the Mapochs Mine fell away. This addressed the Commission’s initial foreclosure concerns. Thereafter the merger parties, the Minister and Highveld reached agreement on a set of proposed conditions which address their prior competition and public interest concerns.