Aton, Aveng and M&R plot their next moves
An eerie calm has settled over the Aton-AvengMurray & Roberts (M&R) battleground. This probably means the parties are busy planning their next tactical move rather than that they are considering settlement talks.
M&R is working through a due diligence on Aveng, the outcome of which will determine whether or not it will go ahead with an offer. If it goes ahead, then it will need to get shareholder and regulatory approval.
On the regulatory front M&R is confident the application to the competition authorities will be straightforward as there is no overlap in the two group’s South African businesses.
Nevertheless they may be tempted to impose conditions on the deal, which would presumably fall to Aton if it acquires control of M&R.
In this context, it is significant that Aton has made its mandatory offer for M&R conditional on its right to reject any conditions attaching to the merger clearance or approval in SA and other jurisdictions. Given the local industry’s history with the competition authorities that might prove to be a useful escape clause for Aton. However, the M&R board indicates management is now on good terms with the authorities.
The independent board of M&R is also working on its response to Aton’s mandatory offer, which was released on June 5. The M&R response is due to be released before July 2.
In 2006, Benchmarks Foundation released a report on the work and living conditions of platinum miners in the Rustenburg area.
It made for grim reading and few who read it would have been surprised by the circumstances that led to the tragic killing of 34 miners in Marikana, the epicentre of the platinum fields, in 2012.
Last week the Centre for Environmental Rights released a report by Intellidex on financial provisioning for rehabilitation and mine closure. It is another well-researched report dealing with a little-interrogated mining industry issue. Its contents spark the same fear that if something isn’t done about this now, we will all come to regret it in the not too distant future.
South African laws require mining companies to set aside money for the management, remediation and rehabilitation of the environmental impacts of their mining operations. This is an entirely reasonable obligation. Mining companies make profits from extracting resources from our land; all that the law attempts to do is require them to set aside funds to clean up some of the mess they create in the process.
The report suggests few companies pay much attention to these laws. Even more distressing is that the Department of Mineral Resources also seems to pay little attention to them. The Centre for Environmental Rights concludes that neither the law nor the accounting standards governing disclosures ensure the necessary transparency and accountability about the financial provision for environmental rehabilitation.
The information disclosed by mining companies “is inconsistent, unclear, in some cases unreliable, and not comparable between companies”. This means it is impossible for shareholders, taxpayers or members of affected communities to hold companies to account.