AMCU slams Lonmin-Sibanye merger over 'magnitude' of job losses at Competition Appeal Court


Thousands of jobs will be lost at Lonmin over a three-year period following its merger with Sibanye-Stillwater, the Association of Mineworkers and Construction Union has argued.

This as AMCU lodged an appeal before the Competition Appeal Court to set aside a 2018 decision by the Competition Tribunal approving the merger. 

It is AMCU's case that the merger, which has already been approved, should either be prohibited due to the magnitude of job losses or that the six-month moratorium on retrenchments, that is presently in place, be extended to 24 months, among other things.

The two mining companies, the Commission, the Tribunal and others are all listed as respondents in the matter. It was heard on Tuesday. 

Job Losses

The deal will see Sibanye acquire Lonmin for R5.17bn. It has already received the approval of several regulatory bodies, as well as the South African Reserve Bank.

Lonmin and Sibanye have previously said that their merger, which was approved with conditions last year, was necessary due to Lonmin’s strained financial position. 

The Commission had previously found that the merger would not lessen competition in the market but noted that the retrenchments that would follow are of public interest. It then referred the merger to the Tribunal for approval. The Tribunal then approved the merger with conditions, which included the six-month moratorium, Fin24 reported. 

It also specified that Sibanye support the roll out of an agri-industrial development programme to benefit surrounding communities of the Lonmin mine in Rustenburg and to lessen the impact of retrenchments.

The Tribunal has not yet decided on the number of merger-specific job losses and the moratorium is to allow the merging parties to investigate and conduct an analysis into a jobs-saving process.

Allegations against Sibanye

According to papers before the court, the Competition Commission said the number of merger-specific retrenchments was likely to be 3 189. AMCU, however, disputes this and says more than 13 000 jobs will be lost as a result of the merger.

In its papers, AMCU argued that Sibanye had influenced Lonmin's operational plan and business decisions and ultimately the amount of retrenchments. 

"The proposed merger results in a substantial negative impact on employment given these significant retrenchments that are likely to take place post-merger," AMCU said in its court papers.

AMCU also slammed the agri-industrial development programme for being inadequate.

"The proposed potential Agri-industrial Program offers the same flimflam condition of the retrenchment conditions, with the merging parties actually not being required positively to commit to anything in order to temper the significant public interest concerns," the papers read.

The union also criticised the Tribunal's assessment of the merger. "The lack of a thorough and adequate assessment by the Tribunal of the true impact of the transaction renders it impossible to properly develop and formulate conditions for a determination of the rationality of the merger-specific retrenchments, that one has not been able to make."  

'Delaying Tactics'

In turn, Sibanye and Lonmin's court papers stated that the process followed in determining the number of affected jobs was "rational".

The two mining companies further argued that the union’s grounds for appeal were "entirely lacking in merit" and that its "attack" on the Tribunal’s decision was nothing more than "dissatisfaction with the result" and "delaying tactics".

"Having examined the effect of the merger on the public interest, the Tribunal held that the merger ought to be approved," the companies said, adding that it believed the Tribunal’s findings were "unimpeachable".

Judgment was reserved.

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