Electroplating. Picture: SUPPLIED
Electroplating. Picture: SUPPLIED

COMPETITION authorities have approved a request by merging parties Zimco Group and Atlantis Metals to leave SA and retrench staff.

The Competition Tribunal acceded on Thursday to their request to lift "certain conditions" imposed by the Competition Commission when it approved their merger in 2014.

The tribunal removed restrictions on relocating the Atlantis seamless rolled anode plant from Brakpan, Gauteng, and said retrenchments were not merger-specific.

This comes after Zimco told the tribunal that Atlantis — which makes lead anodes used in industrial electroplating — was "seriously affected" by Glencore’s closure of mines in the Democratic Republic of Congo and Zambia.

"With the drop in prices of copper and (other) minerals, there is lessened demand for our products," Zimco group MD Wouter Verwey said on Thursday.

"The market is there, but we can’t be competitive because we are producing in SA."

The Atlantis plant could be moved to the world’s largest copper producer, Chile — the biggest market for seamless anodes — or Zambia, Mr Verwey said. But this could take years and required permits, as making lead was a "hazardous" process.

Original merger conditions included ensuring that supply to existing customers was not affected; that the Atlantis plant could not be relocated from Brakpan, or moved out of SA, and that there could be no retrenchments for two years after the merger.

Zimco is a major supplier of products made of zinc, lead, aluminium and alloys, and related chemicals and engineering plastics. In October, Zimco placed the Atlantis plant in care and maintenance.

Zimco had told the tribunal it made financial sense to relocate some of the operations of Atlantis outside SA to reduce costs. In terms of the Competition Act, the tribunal is able to lift competitive conditions if market conditions have changed.

Mr Verwey said Atlantis was the only manufacturer of this kind of anode in SA, and that Zimco paid the original South African patent holder, Electro Winning Products, royalties to manufacture the product.

Future royalties had to benefit SA, even if this meant establishing a plant elsewhere.