Glencore

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UNITED NATIONS, May 23 (Reuters) – Swiss-based commodities giant Glencore Xstrata said on Thursday that it had done nothing wrong when it engaged in metal swaps with Iran, rejecting a suggestion by U.N. experts that such bartering could have been a way of evading sanctions against Tehran over its nuclear program.

A confidential U.N. Panel of Experts report seen by Reuters on Wednesday said alumina-for-aluminum swap deals with Iran by Switzerland-based commodities giants Glencore Xstrata and Trafigura could have been a way to bypass international sanctions.

A Glencore spokesman said the company broke no regulations and did not violate the sanctions. Trafigura did not immediately respond to Reuters’ request for comment.

Reuters reported on March 1 that Glencore had supplied thousands of tons of alumina to an Iranian firm that has provided aluminum to Iran’s nuclear program. Afterward, Trafigura acknowledged it had also traded with the same Iranian firm.

Glencore has confirmed the deals with Iran but insisted it had no knowledge that the company it was supplying alumina to – the Iranian Aluminum Company (Iralco) – was in turn providing aluminum metal to Iran Centrifuge Technology Co (TESA), which the European Union sanctioned in December 2012.

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The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

Canadians trying to make sense of what’s going on in the upper echelons of the newly merged Glencore Xstrata are getting a feel of what it must have been like to be an ancient Greek peasant looking up at his distant panoply of far-from-perfect gods, with all their petty battles, betrayals and all-too-human schemes, and with Mount Olympus as a proto-version of a head office in Switzerland.

Initially pitched as a merger of equals, Glencore’s takeover of Xstrata was completed on May 2 after 15 months and five delays. A pivotal moment was the demand last June by Xstrata shareholders, led by Qatar’s sovereign wealth fund, for a higher acquisition price.

In a judo-like move of redirecting an attacker’s energy against himself, Glencore used that monetary concession to win greater management control over the merged entity, culminating in a November shareholder vote that quashed lavish retention bonuses totalling £140 million that were to have been paid to 70 remaining Xstrata personnel, and forced Xstrata chairman John Bond’s dramatic resignation.

The final deal stands as the largest takeover or merger in mining history and the fifth-largest ever in the broader resources sector, after the megamergers in the oil patch in the 1990s and early 2000s that saw the coming together of Exxon and Mobil, BP and Amoco, Chevron and Texaco, and Total and Elf.

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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.

ROME — A vicious boardroom cull at Glencore Xstrata PLC, the world’s fourth-largest mining company, simultaneously ended the career of one of Britain’s most famous directors and revived the career of one of its most infamous.

At the newly formed company’s first annual general meeting, in Switzerland, a shareholder vote sent chairman Sir John Bond packing.

He was replaced on an interim basis by Tony Hayward, the deputy chairman whose career as chief executive officer of BP PLC was wrecked in 2010, when he took the fall for the disastrous Macondo oil well blowout in the Gulf of Mexico, also known as the Deepwater Horizon spill.

Sir John’s ouster was the result of his support for an extraordinarily lavish executive pay package for the senior executives of Xstrata, among them former CEO Mick Davis. The Anglo-Swiss mining company officially merged with Glencore only last week to create a mining and trading giant with a market value of £44-billion ($68.4-billion) and deep links to Canada, where it owns grain handler Viterra Inc. and nickel miner Falconbridge Ltd.

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http://in.reuters.com/

(Reuters) LONDON – Glencore Xstrata (GLEN.L) told investors on Friday it would return excess cash, slash costs and might sell unwanted assets, raising expectations it would easily exceed planned synergies of $500 million from the deal that created the new group.

Unveiling a management team packed with veteran Glencore executives, the group promised to “cut bureaucracy and duplication”, vowing it would reduce administrative staff, cut divisional offices and underperforming projects to ensure success even at a time of cooling commodity prices.

Mining mega-deals have had a mixed record of success at best over the past decade, but a day after Glencore sealed the acquisition of Xstrata, the biggest ever takeover in the sector, its shares soared 6 percent, helped by a jump in the copper price. At current prices the group is worth $73 billion.

“If we can cut costs enough, get rid of these corporate head offices, we can cut a lot of fat out of the system. These synergies and overhead reductions – that figure can ensure this merger is a success,” CEO Ivan Glasenberg said in an interview.

“The target of $500 million is only the synergies on the trading operations. When we came up with that figure we had no idea what the overheads were in Xstrata … and it wasn’t a takeover at that time.”

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http://uk.reuters.com/

LONDON, May 2 (Reuters) – After years of on-off talks, months of brinksmanship and often bitter negotiations, Glencore’s head Ivan Glasenberg gets to complete the $30 billion acquisition of Xstrata on Thursday, the mining industry’s biggest takeover yet.

But even as the champagne pops, investors and rivals are asking where the highly ambitious South African will look for his next deal. Many are already pointing to vulnerable or undervalued rivals, including Anglo American.

“This is not the endgame, this is the beginning,” analyst Chris LaFemina at Jefferies said. “Glencore wants to buy when no one else wants to buy, and what no one else wants to buy – that is when no one else is bidding and you can buy things cheap. That time is clearly now.”

Xstrata began just over a decade ago with a collection of zinc and ferroalloy assets and coal mines bought from Glencore, building itself up under now departing chief executive Mick Davis into one of the world’s largest diversified miners.

The combination of commodities trader Glencore and producer Xstrata, long Glasenberg’s ambition, creates a mining and trading powerhouse with over 100 mines around the world, some 130,000 employees, and an oil division with more ships than Britain’s Royal Navy.

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