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Monday, 6th June 2005 (3347 views)

The proposed merger between South African company Gold Fields, the world's fourth-biggest gold producer, and the gold unit of Norilsk Nickel has reached a stumbling block in the form of South Africa's foreign exchange controls.<br/><br/>An industry source told Reuters that the link between Gold Fields and its biggest shareholder, Norilsk, through its gold unit Polyus, might be delayed for a year or two until South African authorities lift foreign exchange controls.<br/><br/>"Gold Fields' preferred option is a straight merger with Polyus, but exchange controls are blocking it," the source claimed.<br/><br/>He added that Russian company Norilsk was also in favour of merging with Gold Fields, but foreign exchange restrictions in the latter company's South African base were preventing it from going ahead with the agreement.<br/><br/>Gold Fields and Norilsk were at loggerheads last October when the South African company backed a hostile bid against Norilsk from HarmonyGold.<br/><br/>Having repaired their relationship, the two companies now want to merge to form the world's third largest gold producer, with an annual output of 5.2 million ounces.<br/><br/>South African finance minister Trevor Manuel scrapped foreign exchange limits on outward investments and stated that the eventual goal was to entirely abolish exchange controls.<img alt="track" src="http://directnews.dehavilland.co.uk/dn.gif?feedid=196&itemid=8680667"/>

 

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