South Africa's mining regulator is poring over BHP Group's proposed deal for Anglo American, a spokesperson for the department said, as the potential exit of Anglo from the country adds to worries over the economy ahead of an election.
BHP (BHP.AX) bid $38.8 billion for Anglo American (AAL.L) on Thursday, in a deal to make the world's biggest copper miner.
The deal, which would involve spinning out Anglo American's platinum and iron ore assets in South Africa, is likely to be a concern for the South African government a month before a general election given the potential for job losses.
The South African government will take guidance from the regulatory unit in taking a position on the proposed transaction, the mining department spokesperson added.
In response to a slump in profit due to myriad local challenges and weakening prices of commodities, South African miners are cutting thousands of jobs and investments, muddying the domestic economic outlook.
Anglo employs 45,000 people in South Africa. Its platinum unit, Anglo American Platinum (AMSJ.J), has announced plans to cut 3,700 jobs while Kumba Iron Ore (KIOJ.J) plans 490 job cuts.
South African state asset manager the Public Investment Corporation, which holds 6.99% of Anglo American shares, said it would assess the proposed deal "to ensure value creation" in a critical part of the South African economy.
The Anglo American group also has diamond assets in South Africa.
Any deal would be subjected to regulatory approvals.
Among other issues, South Africa's competition watchdog requires companies to set out how they plan to maintain Black participation in firms, including through equity stakes, and also aim to prevent job losses.
When the world's largest brewer Anheuser-Busch InBev (ABI.BR) gained conditional approval for its $100 billion-plus acquisition of South Africa's SABMiller, it was prohibited from laying off any South African employees as a result of the merger, a condition which was required to endure in perpetuity.
