Glencore Loan Wins Banks on Future Business: Corporate Finance – by Stephen Morris (Bloomberg News – June 19, 2013)

http://www.businessweek.com/

Glencore Xstrata Plc (GLEN) raised the biggest loan on record for a commodity trader at interest rates below those offered to competitors as the 80 banks backing the deal count on winning future business from the company.

The world’s biggest publicly-traded commodity supplier signed $17.3 billion of revolving credit facilities last week, paying a margin of 90 basis points more than benchmark rates for a three-year portion, according to data compiled by Bloomberg. That’s 47.5 basis points less than Vitol Group, the largest independent oil trader, pays on its main $5 billion credit line, and 100 basis points less than Trafigura Beheer BV’s $2.9 billion deal, the data show.

“Banks have fallen over themselves to provide credit as they see Glencore Xstrata as an active and attractive counterparty, which has a big trading book,” said Jeff Largey, head of European metals and mining equity research at Macquarie Group Ltd. (MQG) in London. “Glencore Xstrata is seen as a growth company, it’s been acquisitive in the past and it will remain so. If you’re seen as extending credit to them, that potentially opens up other business opportunities.”

Glencore, which generated revenue of $214 billion last year trading commodities including coal, oil and corn, awards relationship banks ancillary business in trade financing, currency hedging, and acquisitions, according to David Mannarino, a Brussels-based corporate banker for Fifth Third Bancorp, which lends to the company.

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Excerpt: From Meteorite Impact to Constellation City: A Historical Geography of Greater Sudbury – by Oiva W. Saarinen

To order a copy of “From Meteorite Impact to Constellation City”, please click here: http://www.wlupress.wlu.ca/Catalog/saarinen-meteorite.shtml

From International Nickel Company to Inco, and Merger with Mond (1902–1928)

Between 1902 and 1928, International Nickel prospered from the pre-war European demands for nickel in armour plate, the military needs of the First World War, increased peacetime uses for nickel in the United States, and the impact of the roaring twenties. By 1903, nickel production from Sudbury exceeded that of its main rival, New Caledonia. This dominance became continuous after 1905. The control of Sudbury’s wealth was paralleled by the dominance of International Nickel within the nickel industry. Through the use of long-term contracts with its consumers, the company was able to thwart competitors from entering the market, especially in the United States.

Its ability to meet the growing global demand for nickel was facilitated by the opening of Creighton mine in 1901 and the growth of this operation by the First World War into the world’s largest operating mine.10 Its output far surpassed that of the company’s other major source, Crean Hill.

Also significant was the opening of a new smelter by the CCC in Copper Cliff in 1904 which heralded the appearance of the first of three great smokestacks which dominated the Sudbury skyline for years to come. These smokestacks served to disperse the sulphur fumes released during the smelting process into the atmosphere.

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Glencore Said to Study Rio Australia Coal-Assets Combination – by Jesse Riseborough (Bloomberg News – June 11, 2013)

http://www.bloomberg.com/

Glencore Xstrata Plc (GLEN), the biggest exporter of power station coal, is studying a plan to combine some of its Australian coal operations with mines run by Rio Tinto Group, according to two people familiar with the matter.

Glencore and Rio own some of the largest thermal coal mines in the Hunter Valley region of New South Wales and have held initial talks on ways to share mines and infrastructure to cut costs, the people said, asking not to be identified as the discussions are confidential. There is no certainty an agreement will be reached, one of the people said.

Slumping Chinese imports of the fuel and rising output in Indonesia are suppressing demand for Australian coal, prompting producers to fire workers to reduce costs. Baar, Switzerland-based Glencore Xstrata has interests in about 35 coal mines in Colombia, Africa and Australia, accounting for about 10 percent of global seaborne supplies of the fuel.

Spokesmen for Glencore and Rio Tinto declined to comment.

“A sharing of infrastructure and some combination of operations would likely have significant merit given coal earnings are highly sensitive to any reduction in the unit cost base,” Ash Lazenby, an analyst at Liberum Capital Ltd. in London, said today.

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Locals take honours in mine rescue competition – by Staff (Sudbury Northern Life – June 11, 2013)

http://www.northernlife.ca/

Glencore Xstrata Nickel’s Sudbury Operations was the overall runner-up at the 63nd annual Ontario Mine Rescue Competition in Windsor June 6-7.

The Vale West Mines team also won the team special equipment award at the competition. The overall winners at the competition, Glencore Xstrata Copper, Kidd Operations, were presented with gold hard hats.

Seven competing teams from across Ontario, selected in district competitions, were evaluated on their firefighting skills, first aid response, use of emergency equipment and decision-making ability under stress in a simulated underground environment at the South Windsor Recreation Centre.

Mine rescue team members, the backbone of Ontario Mine Rescue, are volunteer mine workers trained by Mine Rescue Officer/Consultants to respond to all types of mine emergencies including fires, explosions and falls of ground.

During the exercise, the five-member teams had to extinguish two fires and restore ventilation to the mine by building a bulkhead and turning on a fan. They also had to bring two miners, isolated underground because of the fires, to the surface. One was suffering burns. These rescues were conducted “under oxygen” (using self-contained rebreathing apparatus).

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‘Mining will fuel our city’s future’ – [Queensland] North West Star Editorial (June 9, 2013)

http://www.northweststar.com.au/

BUSINESS leaders are positive about the city’s future despite a wave of public concern after news of Glencore Xstrata’s Mount Isa Mines’ prediction its local copper operations could cease by 2019.

The North West Star came under fire and wore the brunt of the response towards the revelations, titled “Is this the end?” in Friday’s edition. But many have come forward with positive outlooks for the city beyond current copper operations at the mine, saying it was simply the natural “ebb and flow” of the mining industry

Several mine workers told The North West Star that General Manager for Mount Isa Copper Operations at Xstrata Copper Mike Westerman addressed a group of employees on Thursday morning at the mine site.

The employees said Mr Westerman stated the feasibility study for the Mount Isa Open Pit (MIOP) project, which would have increased the mine’s life by 30 years, was too expensive and copper operations would either close in 2019 or operate until 2021 as a non-profit venture.

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UPDATE 3-Beijing’s forced sale of Glencore Peru mine may play into China’s hands – by Denny Thomas (Reuters India – June 4, 2013)

http://in.reuters.com/

HONG KONG, June 4 (Reuters) – Beijing’s demand that Glencore Xstrata Plc sell a copper mine in Peru may bring rich dividends for China Inc., as two companies linked to Chinese state-backed groups are weighing rival bids for the $5 billion-plus project.

Interest from Chinese state companies in Glencore’s Peruvian mine is a rare case of an asset sale forced by a government as a condition of merger approval working in favour of its own national champions, and underscores China’s new-found clout in regulating global takeovers.

Chinalco Mining Corp International and Hong Kong-listed MMG Ltd, both linked to a Chinese state-owned enterprises, are considering offers for Glencore Xstrata’s Las Bambas mine, according to people close to the matter, less than three months after Beijing blessed Glencore’s $35 billion purchase of Xstrata.

Under the deal struck with Beijing’s Ministry of Commerce in April, Glencore has three months to begin the process of selling Las Bambas, one of the group’s biggest development projects, with the expectation of finding a buyer by the end of August 2014.

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Glencore fires 1,000 workers over wildcat strikes in S.Africa – by by Agnieszka Flak (Reuters U.K. – June 3, 2013)

http://uk.reuters.com/

JOHANNESBURG – (Reuters) – Glencore Xstrata Plc sacked 1,000 workers across three of its chrome mines in South Africa for going on illegal strike last week, bringing those operations to a standstill, the company said on Monday.

The dispute at the mines near Steelpoort, northeast of Johannesburg in Limpopo province, added to long-running friction in the mining industry that has caused production to slow, raised concerns about Africa’s largest economy and sent the rand to fresh four-year lows.

Chromium is a raw material used to produce ferrochrome, a key ingredient to make stainless steel. “About 1,000 of the employees who have participated in the unprotected (illegal) strike have been dismissed,” said Christopher Tsatsawane, a spokesman for the company’s chrome operations.

The strike, which started last Tuesday, was continuing, but supplies to customers were not yet affected, he added. The workers have until Tuesday to appeal the dismissals.

South Africa has well-defined processes for launching strikes and those who fail to get formal approval can be sacked.

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REFILE-Glencore says Iran metals swap deals did not violate sanctions – by Louis Charbonneau (Reuters U.S. – May 24, 2013)

http://www.reuters.com/

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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Editorial: Clash of the Titans [Glencore-Xstrata] – by John Cumming (Northern Miner – May 22, 2013)

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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Mine find drenched in prehistory – by Kyle Gennings (Timmins Daily Press – May 27, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Timmins residents got the chance to see what discovery here has scientists worldwide all abuzz. It is billion-year-old water found 2.4 kilometres underground within the Kidd Mine that has caused such a stir.

A sample of it was exhibited in a jar at Timmins Square Saturday as part of Glencore-Xstrata Kidd Operations’ display for Mining Week.

In 2011, while drilling at the most extreme levels of the Kidd Mine, geologists discovered what is estimated to be billion-year-old water, which attracted attention from national media, scientists and NASA.

“We are looking at a sample of water that was collected at the 8,000 level,” said Pete Calloway, chief geologist for Kidd Mine. “The general thought right now is that this is extremely old water. We aren’t sure how old quite yet, we are leaving it up to the professors at the University of Toronto to make that determination.”

Calloway can draw his own conclusions about the nature of the water, but he’ll let the brains at the university draw the official conclusions. “What we believe is that this water has been trapped within the fractures of the mine and it could be as old as the mine, (mineral formation) which is 2.7 billion years old,” said Calloway. “As we do our work underground and drill the ore body to find out things like grade, tonnage and so on, so that we can plan the mine around the drill holes, we were coming into micro fractures and different faults throughout the mine which in turn liberated the water into the drill hole.”

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Glencore Xstrata shareholders sweep the deck clean – by Eric Reguly (Globe and Mail – May 17, 2013)

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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NEWS RELEASE: PRODUCTION COMMENCES AT BRACEMAC-MCLEOD [Matagami, Quebec]

May 16, 2013, Montreal, Québec: Mr. Harvey Keats, Chief Executive Officer of Donner Metals Ltd. (“Donner” or the “Company”) (TSXV-DON), is pleased to report that production at the anticipated average rate of 3,000 tonnes per day commenced on May 15 at the Bracemac-McLeod Mine located near Matagami, Québec. Donner’s partner and operator, Glencore Xstrata plc (“Glencore Xstrata”), is now processing copper and zinc ore from the new mine following the depletion of ore at their Perseverance Mine.

The Bracemac-McLeod Mine is a 65% Glencore Xstrata, 35% Donner joint venture. As operator, Glencore Xstrata is responsible for the execution of all development, production, processing, milling, smelting and refining activities related to the Bracemac-McLeod Mine, as well as the exploration programs conducted on the Matagami Project.

SUPPLEMENTARY INFORMATION

Discovered in 2007 by the Donner and Glencore Xstrata team, the Bracemac-McLeod mine represents a $159 million investment. It is the 12th zinc mine in the Matagami camp. Matagami operations contribute significantly to Québec’s economic development by employing 260 people, directly injecting $27 million into the economy through wages. In addition, the operations create hundreds more indirect jobs via $13.5 million in annual goods and services procurement through 23 mostly Québec-based companies.

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Xstrata Kidd Operations wins the 2013 Timmins District Mine Rescue competition – by Len Gillis (Timmins Times – May 10, 2013)

http://www.timminstimes.com/

The Mine Rescue Team from Xstrata Copper Kidd Operations has won the Timmins District Ontario Mine Rescue competition.

The winning team beat out a roster of four teams that included defending 2012 champions Goldcorp Porcupine Gold Mines, Lake Shore Gold and Dumas mining contractors in the competition that was held this week at the Whitney Arena. The Kirkland Lake district contest was also held in Timmins and it produced a separate winning team.

The winning Xstrata team was captained by Jason Leger and included team members Shawn Rideout, Danny Morin, Ted Hanley, Guy Champagne, Marc Villars and Stewart Labine.

This is the fourth time Xstrata has won the honours since 2007. Xstrata and Goldcorp have been seesawing back and forth with the top honours in recent years.

The annual event is held to let the mine rescuers from local mining companies pit their skills against each other for local bragging rights, and also for the right to represent Timmins at the all Ontario mine rescue competition, which will be held in June in Windsor, Ontario. This will include the district winners from Red Lake, Sudbury, Thunder Bay, Marathon, Goderich and Kirkland Lake.

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NEWS RELEASE: OMA member earns national safety honours — again

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Xstrata Copper Kidd Operations was presented with the John T. Ryan National Safety Trophy for metal mines for the 11th time. Other national winners were the Potash Corporation New Brunswick Division for select mines and Prairie Mines & Royalty Genesee Mine in Alberta in the coal category and both have been to this podium many times previously. The three winners of the John T. Ryan National Safety Trophies for 2012 have built up safety cultures at their operations which have lasted through decades of time and generations of workers.

“Winning this award again attests to our record of continually improving safety performance over many years,” said Tom Semadeni, General Manager for Xstrata Copper Kidd Operations. “It also speaks to our on-going commitment to achieving Zero Harm so that all of our employees and contractors can continue contributing to the well-being of their families and our community.”

This marks the eleventh occasion that Xstrata Copper Kidd Operations has captured this national award. Previous years as the country’s safest metal mine were 1991, 1985, 1984, 1982, 1981, 1980, 1978, 1977, 1976 and 1975. Kidd is also an 18-time winner of the Ontario regional trophy. Genesee Mine also is an 11 time winner in the coal category. Previous years it has earned the national coal trophy include 2009, 2007, 2005, 2003, 2002, 1999, 1998, 1997, 1996 and 1995.

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Modern mining technologies reviving Sudbury zinc project – by Lindsay Kelly (Northern Ontario Business – May 6, 2013)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

A Sudbury-area zinc deposit that was once considered unprofitable is now getting a second look because of modern mining and metallurgical technologies.

Xstrata Zinc is currently undertaking simultaneous pre-feasibility and feasibility studies on the Errington and Vermilion mineralization in preparation for a $350-million development that would produce an estimated 2,900 tonnes of ore per day over a seven- to 10-year mine life. The development is expected to create between 200 and 250 jobs.

“Errington and Vermilion don’t have nickel; they’re polymetallic zinc deposits,” said Aline Côté, project director for Xstrata Zinc, during a luncheon to cap off Sudbury Modern Mining & Technology, a week dedicated to raising the profile of the industry amongst area youth.

“To my knowledge, there are very few other zinc anomalies in the entire Sudbury basin.” Both deposits contain zinc, copper, lead and “a fair amount” of precious metals, she added.

Mined for a brief period following their discovery in 1924, the Errington and Vermilion deposits are located west of Sudbury along the Vermilion River and Vermilion Lake.

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