JOHANNESBURG The planned
merger of Glencore International Plc and Xstrata Plc may be
delayed after South Africas power utility, Eskom Holdings
Ltd., raised concerns with the South African competition
regulator that the merger could impact Eskoms coal
Eskom said that it does not
intend to block the merger, but it has asked the competition
authority to consider imposing certain conditions because a
merged Glencore-Xstrata could constrain its ability to acquire
competitively priced coal when it needs it.
The Sandton, South Africa-based
utility had complained previously to the government that coal
producers were exporting too much coal and charging domestic
consumers too much.
Zug, Switzerland-based Xstrata,
one of South Africas biggest coal producers, supplies
large quantities of thermal coal to Eskoms coal-fired
power stations. Baar, Switzerland-based Glencore, which also
owns coal mines in South Africa, increased its output fivefold
to 20.6 million tonnes from 2011 to 2012, but also stepped up
Eskom estimated that the merged
entity would account for some 15 percent of Eskoms total
coal supply, according to a Reuters report.
South Africas competition
authority approved the merger in October, but Eskom applied for
a right to intervene. The regulator will hold hearings through
The $31-billion merger has
already received unconditional approval in seven countries.
Chinas competition regulator is still deciding, but it is
expected that China will attach certain conditions to its
approval of the deal.
A version of this article was first
published by AMM sister publication Metal