International company gets approval to exit South Africa
London-based Jubilee Metals Group has received clearance from the Competition Tribunal to sell its South African business.
The tribunal issued Jubilee with a merger clearance certificate and has unconditionally approved the sale of its South African Chrome and platinum businesses.
In August, Jubilee received a binding offer from One Chrome to acquire its chrome and platinum group metals (PGM) operations in South Africa.
The group is set to earn $90 million (approximately R1.5 billion) for the chrome and PGM business, which Jubilee said had reached a high level of maturity.
The group noted that further growth opportunities in the South African operations were limited, primarily due to the requirement for significant capital outlay in co-investing in mining ventures.
The disposal will allow Jubilee to focus on its copper business in Zambia, which requires a dedicated capital structure and management team.
The group believes that there are material opportunities to deliver growth at the existing sites in Zambia by expanding the copper-producing assets.
It added that copper markets support higher earnings potential, resulting in higher margins than those of chrome.
Notably, as part of the sale, Jubilee retains all current rights to the Tjate Platinum mining project, which offers it exposure to the potential upside of the PGM market while focusing on Zambia.
The deal does still require approval from the South African Reserve Bank (SARB), but Jubilee does not believe that this will be withheld.
The last material condition precedent is audit-related, with this workstream expected to be completed by the end of November.
If all of the suspensive conditions of the disposal are not satisfied or waived by 31 December 2025, then the sale agreement may be terminated by either party.
International exits
Jubilee joins a host of other high-profile companies that are exiting or cutting back their operations in South Africa.
In the mining space, this includes Anglo American unbundling its platinum business, now known as Valterra Platinum.
International banking giants HSBC and BNP Paribas have also exited the local market, while trading giant IG Group has also left the country.
Consulting giant Bain & Company is also leaving South Africa following the fallout over its involvement in state capture.
Energy giant Shell plans to sell its downstream business in South Africa, which includes its hundreds of petrol stations.
Recently, Norton Rose Fulbright announced that it would be leaving South Africa, with a new independent local law firm acting in its place.
Despite the negativity surrounding South Africa, several other companies are bullish in the nation and bringing their operations here.
Club Med is launching a resort in KZN next year, while luxury hotel brand, OKU Hotels, is also making its debut in the country after purchasing the rundown Ritz Hotel in Seapoint, Cape Town.
Tata Motors is also returning to South Africa, while the Australian mining group, West Wits Mining, will also open South Africa’s first new underground gold mine in 15 years.
Saudi commercial giant Zahid Group is also part of a consortium purchasing JSE-listed Barloworld.
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