U.S. Will Forgo Inquiry Into Bid for Gold Firm

The Reagan Administration decided Friday not to investigate the national security implications of a sidetracked, $4.9-billion hostile takeover bid for Consolidated Gold Fields PLC, a British gold and strategic-metal mining firm.

But the Administration warned that a renewed bid by Minorco S.A. could trigger a U.S. investigation. Minorco is a Luxembourg investment arm of the South African gold and diamond-mining giants, Anglo American Corp. and DeBeers Consolidated Mines Ltd.

Consolidated Gold generates half its revenue from U.S. operations, primarily from ARC America Corp., a construction-materials firm in Newport Beach, and Newmont Mining Corp. in New York, this nation’s largest gold-mining firm.

Minorco’s bid was automatically abandoned when British authorities decided Oct. 25 to seek a national security investigation by the British Monopolies and Mergers Commission. But Minorco said it would work with authorities to clear up any problems and renew the offer.

In a letter to Minorco’s New York lawyers, the Administration, through the Treasury Department, said it would not initiate a probe under the recently amended Defense Production Act “because the offer, having lapsed, is no longer in existence.”

But, the letter continued, the department reserved the right to investigate “any new offer by Minorco” in the future “after the Monopolies and Mergers Commission has completed its review.”

Under the act, the Administration had 30 days to respond to Consolidated Gold’s request for an investigation. The deadline was Friday.

A merger would put the South African conglomerate in control of one-third of the world’s gold production, more than half the titanium feed stocks, two-thirds of the zircon and more than half the platinum. The strategic metals are used in the manufacturing of military equipment and weapons, as well as in paints and furnaces.

More than a dozen U.S. senators, including Minority Leader Bob Dole, wrote letters urging the Administration to initiate an investigation of the deal.

Minorco also is appealing a preliminary injunction issued Oct. 24 by a federal court in New York. The injunction, sought by Consolidated Gold and its U.S. subsidiaries, halts the merger on the grounds that the concentration of gold production would violate U.S. antitrust laws.