The Bundeskartellamt has cleared the acquisition of Sierra Rutile Limited by Iluka Resources Limited. Both companies are active in opencast mining in Australia and Sierra Leone and achieve a joint turnover in the three digit million range with the worldwide sale of the extracted raw materials. Among the products extracted by the companies are the minerals ilmenite and rutile. These contain titanium dioxide which is not found in its pure form in nature and from which pigments are manufactured for paints and dyes and for other industrial applications. The acquisition had to be notified to the Bundeskartellamt because the companies also sell the raw materials to well-known pigment manufacturers with business locations in Germany and achieve significant turnover here.

Andreas Mundt, President of Bundeskartellamt: "As a result of the acquisition Iluka's position in the natural rutile market will be significantly strengthened. We therefore examined the proposed acquisition in depth and assessed the extent to which customers are able to use other titanium dioxide raw materials than natural rutile for further processing. We found that there is a high level of substitutability between these raw materials and therefore expect that there will still be sufficient competitive pressure on the parties after the merger."

The authority's investigations have shown that it is comparatively easy for customers to substitute natural rutile with several refined products based on ilmenite, such as synthetic rutile, titanium slag and upgraded titanium slag. There are several important manufacturers of these refined products, including for example the Australian mining company Rio Tinto. The pigment manufacturers, some of which are themselves active in the extraction of raw materials, will continue to have sufficient procurement alternatives in the future due to current overcapacities in the market and the existence of additional mineral deposits.