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Jun 26, 2009
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South Africa retains mining merger concerns

By
Reuters
Published
Jun 26, 2009

JOHANNESBURG, June 26 (Reuters) - South Africa's key concerns over Xstrata Plc's merger proposal to Anglo American Plc are the impact on jobs and competition, its mining ministry said after talks with executives from the two groups.


Millicent Kgoete, belt attendant at Thorncliffe Mine South Africa - Photo: www.xstrata.com

Restating the South African government's view on the proposed deal, ministry spokesman Jeremy Michaels said on Friday 26 June the list of concerns was topped by how jobs would be affected, antitrust issues and other implications for the wider South African economy.

But he said the ministry needed more details to form a final view on the possible deal.

"The director general met the representatives of Anglo and Xstrata separately and essentially the meetings shed some light on the proposed merger," Michaels said.

"However, the department requires more detail to be able to get a better picture of the implications," Michaels added.

"The department will consider the formal application for the merger if it is launched ... At the same time the government will obviously look at the proposal to ensure the country's best interests are protected."

In separate talks on Thursday 25 June, Sandile Nogxina, director general of South Africa's mines department, met Anglo American Plc Chief Executive Cynthia Carroll and executives from Xstrata.

South Africa, where Anglo has the bulk of its mines, has already said it is concerned about the impact on jobs and competition from a merger which Xstrata unveiled on Sunday 21 June. Anglo has rejected the idea but Xstrata has yet to back down, promising on Wednesday 24 June the deal could generate cost savings of $1 billion.

(Reporting by James Macharia; Editing by David Holmes)

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