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Chinese group buys Las Bambas mine for $5.85-billion, giving boost to sector – by Rachelle Younglai (Globe and Mail – April 14, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Glencore Xstrata PLC sold its massive Peruvian copper project to Chinese investors for $5.85-billion (U.S.) in cash, the biggest deal in the mining sector in more than a year and an encouraging sign for an industry that has been hit hard by lower metal prices.

The sale of Las Bambas to a consortium led by state-owned China Minmetals Corp. could inject more life into the mining sector, which has struggled with fears that China’s slowing economy will crimp demand for raw materials.

“This shows you that Chinese companies still really believe in China. Westerners are overreacting to the lower economic growth,” said John Gravelle, mining leader with consultancy firm PricewaterhouseCoopers LLC.

The large Las Bambas copper mine is mostly built and scheduled to start production next year. It is scheduled to produce 400,000 tonnes of copper a year from 2015, equivalent to 12.5 per cent of 2013 imports of copper metal by China. Chinese regulators required the divestiture of the Peruvian asset when Switzerland-based Glencore bought Anglo-Swiss Xstrata.

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China-backed group pays US$6B for Glencore’s Las Bambas copper mine – by Karen Rebelo and Silvia Antonioli (Reuters/National Post – April 14, 2014)

The National Post is Canada’s second largest national paper.

A Chinese consortium bought the Las Bambas copper mine in Peru from Glencore Xstrata for US$6 billion, the high end of analysts’ forecasts in China’s biggest acquisition of a mine, showing the strength of its long-term need for copper.

MMG Ltd, the Hong Kong-listed offshore arm of China’s state-owned Minmetals Corp, led the winning bid in partnership with Hong Kong-registered Guoxin International Investment Corp and state-owned investment giant CITIC Group.

Commodity trader Glencore had agreed to sell Las Bambas to secure approval from China’s competition authorities for its takeover of miner Xstrata. Beijing made this condition to prevent the merged group from having potentially too much power over the global copper market.

A Chinese buyer had been considered a virtual certainty since Las Bambas was put on the block, given the deep pockets of China’s state-owned enterprises and its hunger for copper as the world’s top consumer of the metal.

Glencore will receive about US$5.85 billion in cash upon completion of the deal, which compared with analysts’ forecasts between US$5 billion and US$6 billion.

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Glencore Xstrata blocking progress at Donkin coal mine – by Roger Taylor (Halifax Chronicle Herald – March 31, 2014)

http://thechronicleherald.ca/

In hindsight it may have been a mistake for the Nova Scotia government to allow mining giant Xstrata plc to win control of the mothballed Donkin coal mine.

It seemed like a good idea at the time to have a company of the stature of Xstrata, with the know-how and financial backing to get the job done, to take over management of the underground mine.

But now, after several years of waiting, the market for coal has changed and so has the makeup of Xstrata, which was acquired by a major competitor, Glencore, in 2012. It didn’t take long for the new company, Glencore Xstrata plc, to realize the Donkin mine was too small for a corporation of its scale and that the return on investment couldn’t possibly meet its expectations.

So Glencore Xstrata announced it would instead sell its 75 per cent stake. But until a buyer could be found it would lay off the few workers looking after the site and would allow the mine to flood.

Although Glencore considers the Cape Breton project small, its 25 per cent minority partner in the Donkin mine, Morien Resources Corp. of Dartmouth, believes the development of the mine is still a winning proposition.

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Glencore closer to iron ore ambition – by Katrina Manson and Javier Blas (Financial Times – March 30, 2014)

http://www.ft.com/home/us

Glencore has cleared a key hurdle in its ambition to become an iron ore miner, reaching a preliminary deal with the west African country of Mauritania for a $1bn contract for access to railway and port facilities.

The commodities giant is keen to expand into iron ore, a key ingredient of steel and a vital source of profits from rivals Rio Tinto, BHP Billiton and Vale of Brazil. The trader is seeking to develop three big projects in Mauritania, two in partnership with state-controlled miner Société Nationale Industrielle et Minière, which has exclusively exported the mineral from the country since the 1960s.

The railway contract is one of the three key obstacles to build the remote Askaf mine. Although Mauritania, which relies on iron ore for half its exports and a quarter of its tiny $4bn economy, wants to boost iron ore production, the two parties have spent two years negotiating access to railway.

Initially, SNIM asked Glencore far too high a price for access to its railway for the next 20-25 years, according to people familiar with the negotiations. But recently both sides reached a preliminary deal, pending some final discussions.

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Glencore’s low-profile billionaire – by Lisa Steyn (Mail and Guardian – March 20, 2014)

http://mg.co.za/

Glencore Xtrata chief executive Ivan Glasenberg may be a commodities emperor, but you wouldn’t know it if you met him. You may have glanced his way while he was out on a run around Zoo Lake in Johannesburg, or perhaps you’ve sat at the table next to him at your local pizzeria. But chances are you would not have had any idea that the man just metres from you was Ivan Glasenberg – one of the world’s wealthiest and most controversial executives.

Each morning, Glasenberg changes out of his running clothes, dons a power suit and steps out as chief executive of $70-billion commodities giant Glencore Xstrata. He is often described as charming when he wants to be and ruthless when he needs to be. “He has put the fear of god in almost everyone,” a source said.

Peter Major, a fund manager and analyst at Cadiz Corporate Solutions, said Glasenberg could indeed be charming – “but then so was Stalin …You wanted to be liked by him and make him happy. Even if he had a reputation for being mean.”

It may have been this reputation that saw Glasenberg’s post box at his home in Rueschlikon in Switzerland blown up earlier this year by a group of activists protesting against the World Economic Forum in Davos as well as alleged poor working conditions at the company.

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Glencore Xstrata: A controversial colossus – by Lisa Steyn (Mail and Guardian – March 20, 2014)

http://mg.co.za/

You probably don’t know it, but almost everyday is a Glencore Xstrata day.

With global sales of $239-billion last year, as reported in its 2013 annual report released on March 18, the commodities colossus straddles markets from chrome and copper to cotton and corn. Its reach is so pervasive that it’s quite likely that the appliances you use or food items you consume each day have in some way been touched by Glencore Xstrata.

The company, based in the low-tax jurisdiction of Switzerland, made collective dividend payments to its seven directors, the largest shareholders, of $500-million during the past financial year. Johannesburg-born Ivan Glasenberg, the Glencore Xstrata chief executive who owns 8.4%, the largest share of the company, received dividend payments of $173-million in 2012 and $182-million last year.

When Glencore listed in 2011 it was owned by just 480 people, all employees. The company, which operates in 50 countries, emerged from obscurity in 2011 when Glencore first listed on the London Stock Exchange. In 2013 it merged with Xstrata in the largest takeover ever seen in the mining industry, at a cost of $46?billion. When it listed on the JSE in November 2013, it was instantly the third largest listing.

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Glencore Xstrata mining merger produces $2.4bn in synergies – by Jana Marais (Business Day Live – March 9, 2014)

http://www.bdlive.co.za/

GLENCORE Xstrata has done an “excellent” job in finding synergies through the mining giants’ $29bn merger in May 2013, the combined group’s first set of annual results shows.

Releasing the results this week, CEO Ivan Glasenberg said the group had increased the synergy benefits of the merger from the original estimate of $2bn a year by 2014 to $2.4bn, and there was scope for further cost savings.

Despite a $7.5bn write-down on the value of Glencore Xstrata assets since the takeover on May 2 last year, the merger was a good decision and the additional realised cost savings show Glencore has done an excellent job, said Hanré Rossouw, head of commodities for frontier and emerging markets at Investec Asset Management.

“Because it was an all-share deal, the impairment is really an accounting issue related to the share price movements since the date the transaction was finalised and the allocation of fair value to Xstrata assets. It is not a cash-flow item,” Mr Rossouw said.

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UPDATE 2-Glencore to snatch more benefits from Xstrata acquisition – by Silvia Antonioli (Reuters U.S. – March 5, 2014)

http://www.reuters.com/

LONDON, March 4 (Reuters) – Commodities trader and mining group Glencore Xstrata Plc has raised its estimate of the savings it expects following last year’s Xstrata acquisition, as it focuses on cost-cutting and targets higher returns for shareholders.

After being hammered by billion of dollars in writedowns as falling metal prices dented their assets’ value, miners have worked to trim costs and tidy their balance sheets.

The group, which completed the record-breaking acquisition of Xstrata in May, was also victim of souring sentiment in the mining sector and in August announced a $7.5 billion impairment on the assets it inherited from the miner.

But the company, whose interests range from a 44 percent stake in the Collahuasi mine in Chile, one of the world’s largest copper mines, to a trading hub in its hometown of Baar, Switzerland, has identified cost and efficiency savings from the acquisition of more than $2.4 billion. That compares with guidance of $2 billion given late last year.

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Vale ‘Not in Hurry’ in Over Canada Glencore Negotiations – by Liezel Hill and Juan Pablo Spinetto (Bloomberg News – February 22, 2014)

http://www.bloomberg.com/

Vale SA (VALE5), the world’s second-biggest nickel producer, said it’s not in a rush to reach an agreement with Glencore Xstrata Plc to combine operations in Canada’s Sudbury basin.

“We are studying and we are talking but we are not in a hurry,” Peter Poppinga, Vale’s head for base metals, said yesterday in an interview.

Vale and Glencore, the world’s third-largest refined nickel producer, last year initiated talks on jointly operating mines, mills and smelters in the Sudbury area, about 400kilometers (250 miles) north of Toronto, Poppinga said in November. Vale Chief Executive Officer Murilo Ferreira told reporters on Dec. 18 his Rio de Janeiro-based company expected to make a decision on a possible combination in the first quarter.

Poppinga said yesterday he didn’t expect an agreement “early this year,” and declined to comment further on the talks. Glencore declined to comment on the state of talks with Vale in an e-mail statement.

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First Nation takes proactive approach with mining companies – by Jonathan Migneault (Sudbury Northern Life – February 11, 2014)

http://www.northernlife.ca/

Wahnapitae First Nation has taken a proactive approach to promote environmental sustainability in its dealings with mining companies like Vale, Glencore and KGHM. Since the early 1990s, the First Nation, located northeast of Sudbury, has worked to develop relationships with mining industry partners.

Cheryl Recollet, Wahnapitae First Nation’s environmental co-ordinator, said her department has developed in-house capacity over the past 15 years to conduct environmental assessments for mining companies who work near their reserve boundaries.

In 2012, Wahnapitae First Nation’s sustainable development department founded Tahgaiwinini Technical and Environmental Services Group. The company has four technicians and two advisers on staff, who provide mining companies with a variety of environmental management services.

The technicians are trained to use geographical information systems to map the flow of groundwater, plumes of air pollution, and provide information on the First Nation’s territory, species at risk, and traditional hunting territory.

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Kidd Mine life may get three-year extension – by Jeff Labine (Timmins Daily Press – February 11, 2014)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – If all goes according to plan, Glencore Copper’s Kidd Mining project could have its life extended by another three years.

City council heard from general manager Tom Semadeni about the mining project at Monday night’s meeting. The mine produces copper, zinc and is rumoured to be one of the largest silver mines in Canada. The Kidd Mine also has the distinction of not only being the deepest mine in Canada but also the deepest base metal mine in the world at more than 9,600 feet.

The mine’s life was originally expected to end in 2018 but that might not be the case. Semadeni said the way to make sure the mine continues until 2021 is by providing opportunities for people and for development.

The plan is to continue to keep a safe work environment, make reliable mining plans and find cost savings. “The only reason why I work there and why everyone works there is to maximize the benefit of that ore body,” he told council. “We want to extend its operational life. That’s important to everyone’s interest. We want to do that safely and cost efficiently. We recognize that it is hard because it is deep. It’s technically challenging and expensive.”

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Glencore, Vale slow to offer Sudbury mining plan details (CBC News Sudbury – January 7, 2014)

http://www.cbc.ca/sudbury/

Rumours continue to swirl about what the future looks like for Vale and Glencore in Sudbury. The two mining giants still aren’t talking publicly about plans to combine some operations.

Comments just before Christmas from Vale’s CEO indicated the two rivals are now in serious discussions about how to work more closely in Sudbury.

But one industry expert says details will be slow in coming. “I think we are going to see very little information come out that is public that we can actually evaluate,” said Bruce Jago, head of the Goodman School of Mines at Laurentian University.

“They are going to keep this really close to their chest.” Jago said he doesn’t think any new found co-operation between Vale and Glencore’s Sudbury Integrated Nickel Operations will result in any major job losses.

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[Vale, Glencore Sudbury] Merger wouldn’t result in plant closures, mine analysts say – by Harold Carmichael (Sudbury Star – January 6, 2014)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

If ongoing Vale and Glencore Xstrata discussions produce an agreement in 2014 on how to mine nickel and copper in the Greater Sudbury area more cost-effectively, there might be some short-term job cuts, but no big plant closures, says a man who runs a website devoted to mining.

“Absolutely not,” said former Greater Sudbury resident Stan Sudol, who now works in Toronto and operates The Republic of Mining website. “The two operations – the Clarabelle Mill and the Strathcona Mill – process different types of ore. On the north slope (of the Sudbury Basin), the ore is heavy in copper and PGMs (platinum-group metals). The Clarabelle Mill, meanwhile, deals with ore from the south side which is more nickel heavy. I would be very surprised if either of the mills gets closed.”

Sudol added that the Falconbridge Smelter, which he understands is operating under capacity, is processing ore from Australia and the Raglan project in Quebec, in addition to local ore. “The operation is a part of a global industry,” he noted.

On. Dec. 18, Reuters reported Vale’s chief executive officer Murilo Ferreira said he expects Vale’s “consortium” with Glencore Xsrata in Greater Sudbury nickel projects to be defined by the first quarter of 2014 and for the venture to operate as a single unit.

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Vale CEO talks ‘consortium’ with Glencore – by Staff (Sudbury Star – December 19, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

A comment by Vale chief executive officer Murilo Ferrira, reported by Reuters on Wednesday, will have people talking again about a potential merger, or partial merger, between Vale and Glencore Xstrata operations in Sudbury.

Reuters reported Ferreira as saying he expects Vale’s “consortium” with Glencore in Sudbury nickel projects to be defined by the first quarter of 2014 and for the venture to operate as a single unit.

Vale spokesman Cory McPhee said Ferreira’s statement was made at an end-of-the-year luncheon with reporters in Rio de Janeiro on Wednesday at which Ferreira answered several questions.

His answer to the one about a Sudbury merger was a repetition of what he said during Vale Days at the New York and London Stock Exchanges a few weeks ago when he told reporters he expected to conclude the discussions in the first quarter of 2014, said McPhee.

“He’s speaking very broadly to potential outcomes,” said McPhee.

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Glasenberg Raises Glencore’s Bet on Coal as BHP Pauses: Energy – by Thomas Biesheuvel & Jesse Riseborough (Bloomberg News – December 5, 2013)

http://www.bloomberg.com/

Ivan Glasenberg, the billionaire running commodities supplier Glencore Xstrata Plc, is investing more in thermal coal than his three closest competitors combined even as investors warn the fuel’s outlook is deteriorating.

The former coal trader is betting on prices rebounding from a three-year drop. The Swiss company, in which he owns 8 percent, is spending $4.75 billion, largely on projects inherited in the takeover of Xstrata Plc, to boost output 21 percent through 2016. At the same time, BHP Billiton Ltd., the biggest mining company, Rio Tinto Group and Anglo American Plc, have stalled new investments, sold mines or halted others.

Glasenberg, 56, is deepening his bet on coal as appetite wanes among some investors for companies that extract fuels blamed for making the biggest contribution to climate change. Share prices of the four largest single-commodity thermal-coal producers have tumbled an average 25 percent in the past 12 months as an explosion in lower-cost supplies of U.S. shale gas compounds a weaker outlook for exports to China.

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