Shaka inspires another attack against the gold cartel

By Antony Sguazzin

Johannesburg, Feb. 21 (Bloomberg) -- Gold Fields Ltd., the
world's No. 3 gold producer, said it abandoned attempts to
merge with Canada's Franco-Nevada Mining Corp., a union that
would have given the new company some $700 million for
expansion.

The plan to merge with Franco in a C$2.7 billion ($1.76
billion) transaction was thwarted by the South African
government in September on the grounds that it would bring
few benefits to Africa's biggest economy. The company would
have moved its headquarters to Toronto from Johannesburg
under the plan.

Gold Fields had said it hoped to convince the government
to allow the merger though chairman Chris Thompson signaled
earlier this month it was unlikely to do so. Franco has
some $700 million in cash that could be used to buy mines
outside South Africa where costs are high.

Speculation has grown over the last two months that Gold
Fields could be the target of a takeover bid from its South
African rival, AngloGold Ltd., the world's biggest producer.
An alliance with AngloGold could give Gold Fields
shareholders exposure to gold mines outside South Africa.

AngloGold runs 24 mines around the world. With the exception
of Tarkwa in Ghana, all of Gold Fields' mines are in South
Africa.

Gold Fields shares fell 35 cents, or 1.2 percent, to 28. 4
rand. The statement was released after the market closed.