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COLUMN-Glencore’s Glasenberg, live and unplugged – by John Kemp (Reuters.com – February 26, 2013)

http://www.reuters.com/

Feb 26 (Reuters) – “What we’ve got to do, when the markets do get stronger, no need to keep building a new asset and let’s keep the market tight for a while,” Glencore Chief Executive Ivan Glasenberg said in remarks about overinvestment in the mining industry.

Glasenberg’s comments underlined the case for vigilant antitrust enforcement in the mining sector.

“Not that we’re here to create an anti-competitive nature, but we’ve got to get returns. You the investors want to get returns on our assets and it’s easily done if we just use our brains,” the Glencore chief told investors at the BMO Capital Markets conference in Florida, reported by Bloomberg.

“We’ve always been wanting to keep building and keep putting the cash which we generate into new assets. That’s what we’ve got to stop doing as a mining industry. We’ve got to learn about demand and supply,” he said.

Glasenberg was criticising departing chief executives at BHP Billiton, Rio Tinto and Anglo American for reacting to higher prices by investing in too much new capacity (“Glencore’s CEO says rival mining chiefs really screwed up” Feb 26).

But his frank observations about the nature of mining profitability confirm the need for heightened scrutiny of asset purchases and mergers and acquisitions activity in the industry.

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‘The big guys really screwed up’: Glencore CEO warns industry on building too many mines – by Peter Koven (National Post – February 26, 2013)

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

Ivan Glasenberg is calling on the new generation of mining CEOs to learn from their predecessors and stop building so many new mines just because they can.

“The big guys really screwed up,” Mr. Glasenberg, the CEO of Glencore International PLC, said on Monday in a presentation at a BMO Capital Markets conference in Florida.

“We’ve always been wanting to keep building and keep putting the cash which we generate into new assets. That’s what we’ve got to stop doing as a mining industry. We’ve got to learn about demand and supply.”

Mr. Glasenberg is one of the few CEOs of a major mining company that was not fired or otherwise replaced in the past year. Other seniors like Rio Tinto Ltd., BHP Billiton Ltd., Anglo American PLC and Barrick Gold Corp. announced changes at the top. In most cases, the shake-ups were due to poor stock performance that was a result of disappointing profits, overpriced acquisitions or both.

A common complaint about some of the senior miners is that they championed the so-called “build at any cost” strategy, in which they continued to greenlight new projects despite relatively flat commodity prices and uncertain demand. As a result, labour became increasingly scarce and capital costs soared across the industry.

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Glencore’s CEO Says Rival Mining Chiefs ‘Really Screwed Up’ – by Jesse Riseborough (Bloomberg.com – February 26, 2013)

http://www.bloomberg.com/

Glencore International Plc (GLEN)’s billionaire Chief Executive Officer Ivan Glasenberg criticized his recently departed mining CEO peers for swamping the industry with mines and new production that’s crimped profits.

“The big guys really screwed up,” Glasenberg, 56, who runs the world’s largest publicly traded commodities supplier, told investors yesterday in a presentation.

“We’ve always been wanting to keep building and keep putting the cash which we generate into new assets,” he said. “That’s what we’ve got to stop doing as a mining industry. We’ve got to learn about demand and supply.”

BHP Billiton Ltd. (BHP) and Rio Tinto Group (RIO), the world’s two largest mining companies, and Anglo American Plc (AAL) have reported lower profits this month on rising costs and waning global growth. The CEOs of those three have quit or announced plans to depart after investors criticized them for the acquisition of assets whose value was later written down.

“Now we have a new generation of CEOs; I hope CEOs have learnt their lesson,” Glasenberg told the BMO Capital Markets conference in Hollywood, Florida. “They built, they didn’t get the returns for their shareholders. It’s time to stop building.”

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With blood in the water, mining’s great white shark is on the hunt – by Eric Reguly (Globe and Mail – February 23, 2013)

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.

ROME — Beheadings are putting the mining world through something akin to the French Revolution. Mining bosses who landed their jobs in the bubble era – 2006 and 2007 – or did their signature top-of-the-market deals in those years are being fired with alacrity. Or they are announcing their retirements, much to the delight of shareholders grown weary of the value destruction borne of stunningly overpriced takeovers and soaring costs.

The changing of the guard started in the autumn, when Cynthia Carroll said she would quit as chief executive officer of Anglo American. Not long after, BHP Billiton, the world’s top mining company, revealed that it would replace Marius Kloppers, the man who made a wrong bet on shale gas and botched the attempted takeover of Potash Corp. of Saskatchewan (the new CEO is Scotsman Andrew Mackenzie). Last month, it was Rio Tinto boss Tom Albanese’s turn. The biggest sinner of them all, he was knocked off for his boneheaded purchase of Montreal’s Alcan in 2007 for $37-billion (U.S.), most of which has now been written off.

Canadian mining bosses have been frog-marched to the guillotine too – Tye Burt of Kinross Gold and Aaron Regent of Barrick Gold were two of the late 2012 victims. A year earlier, Roger Agnelli was pushed out of Vale, the Brazilian company that paid an eye-watering price for Canada’s Inco.

The last man standing is Ivan Glasenberg, the Glencore International CEO who is about to become the head of the mining and trading colossus to be formed by the merger of Glencore and Xstrata, the Anglo-Swiss miner that owns Falconbridge.

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[Sudbury]Mining to recover in 2013, board predicts – by Carol Mulligan (Sudbury Star – February 21, 2013)

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

New developments in the mining industry in 2013 will contribute to a predicted 1.7% growth in real gross domestic product in Sudbury, up from 0.6% in 2012, according to the Conference Board of Canada.

Sudbury was second from the bottom in economic performance of 28 census metropolitan areas last year, but the board is forecasting it will move up to 22 in 2013. GDP is a measure of the overall economic activity — the value of goods and services produced — within an economy.

Sudbury’s economy was held back last year by significant declines in several sectors, said Jane McIntyre, an economist with the Conference Board of Canada. McIntyre collects data for several cities, Sudbury among them.

In 2011, there was strong growth in the primary and utilities sector, mostly mining, as Vale recovered from the effects of a year-long strike by United Steelworkers.

Weaker metal prices last year, as well as the temporary shutdowns early in the year at Vale mines and the closing of the Frood portion of Frood-Stobie Mine at the end of the year, took a “chunk” out of that sector in 2013.

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UPDATE 2-Chile’s Collahuasi says mineral resources up 19 pct in 2012 – by Fabian Cambero (Reuters.com – February 6, 2013)

http://www.reuters.com/

SANTIAGO, Feb 6 (Reuters) – World No. 3 copper mine Collahuasi said on Wednesday its mineral resources grew by 19 percent to 9 billion tonnes last year compared with 2011 levels, due in part to new drilling campaigns and improvements in mining design.

Average ore grades are 0.81 percent copper, Collahuasi said, an enviable level as grades slip in many of leading copper
producer Chile’s ancient, tired deposits. Mining reserves increased 10 percent to 3.2 billion tonnes, the mine added.

“The notable increase in our base of mineral resources gives a clear indication of the significant future potential of an
expansion at Collahuasi,” new chief executive officer Jorge Gomez said in a statement.

Collahuasi is seeking to turn the corner after a tough 2012. The deposit produced around 284,000 tonnes of red metal last
year, tumbling roughly 37.3 percent from 2011 levels. It hopes to produce more than it did in 2012, Gomez told Reuters late last month.

Global miners Anglo American and Xstrata each own 44 percent of the mine. The remaining 12 percent is owned by a consortium of Japanese companies led by Mitsui & Co.  Collahuasi is mulling expansion plans that seek to double annual production. But Xstrata’s head of copper, Charlie Sartain, said last year no progress on ambitious expansion plans would be considered for the operation until the current turnaround was complete.

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Glencore’s Glasenberg Seen Eyeing Anglo After Xstrata – by By Matthew Campbell & Jesse Riseborough (Bloomberg.com – Feb 4, 2013)

http://www.bloomberg.com/

What will Ivan do next? That’s the question likely to percolate amid seaside cocktails in Cape Town this week as mining executives gather for a four-day industry confab of speeches and discreet meetings.

Ivan, as everyone calls him, is billionaire Ivan Glasenberg, chief executive officer of Glencore International Plc. (GLEN) Next month he’s due to close a $37 billion takeover of Xstrata Plc (XTA), creating the world’s fourth-largest mining company. While he isn’t scheduled to address the annual Investing in African Mining Indaba conference, his outsized role in the industry almost guarantees speculation about his next move.

It could be a whopper. Glasenberg, 56, may consider a long- speculated takeover of Anglo American Plc (AAL), according to people familiar with his thinking. The $43 billion mining giant trades at the cheapest level relative to profit of any rival, data compiled by Bloomberg show. Also on his mind: Smaller deals such as a purchase of Eurasian Natural Resources Corp. (ENRC), which has operations in the Democratic Republic of Congo that complement Glencore’s, said the people, who asked not to be identified because the matter is private. First Quantum Minerals Ltd. (FM) is also a candidate, according to Sanford C. Bernstein & Co.

“I don’t see why Glasenberg shouldn’t try this again with another target,” said Paul Gait, a mining analyst at Bernstein in London. “If Glasenberg wants to continue expanding, he has two choices: double down on the Congo via the ENRC or First Quantum route and be a third-world miner, or set up a lower political-risk entity by merging the Anglo and Xstrata operating assets.”

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Tentative deal [with Sudbury Xstrata union] reached at 7:45 a.m. – by Jonathan Migneault (Sudbury Star – February 1, 2013)

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

UPDATE: A deal was reached about 7:45 a.m. Fri. Ratification meetings will be held at 1 and 7:30 p.m. at the Dowling Leisure Centre.

Negotiators for Xstrata Nickel and Mine Mill/C AW Local 598 were still bargaining in an effort to reach a new collective agreement at press time Thursday.

About a half-dozen workers began preparing the picket line outside the Falconbridge smelter at midnight when the last contract expired. Some employees said that as long as talks continued, it was good news. “We’re just going to wait it out,” said Raz Delmastro, a health and safety worker at the smelter.

When the last negotiations occurred between the union and Xstrata in 2010, talks continued until 5 a.m. before an agreement was reached. Earlier Thursday, Guy Desloges, Xstrata Nickel unit chair for Mine Mill, confirmed that bargaining was continuing.

He offered only a “no comment” when asked how talks are progressing, but said the union has completed its strike preparations in the event a new deal was not reached by 12:01 a.m. Friday, when its three-year contract with Xstrata Nickel expires

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Ivan Glasenberg’s Play For Xstrata Forces Him From His Cone of Secrecy – by Tim Treadgold (Forbes Asia Magazine – January 30, 2013)

HTTP://WWW.FORBES.COM/

This story appears in the 11 February 2013 issue of Forbes Asia.

Commodities trading has already made Ivan Glasenberg one of the richest people in the world. Now he was trying to pull off one of the world’s biggest corporate deals, one that would make him even richer. As chief executive ofSwitzerland‘s Glencore International he had usually managed to keep his head down and stay out of the news.

But last year, as Glencore waged its $33 billion takeover battle for miner Xstrata, he was learning that he could no longer live the secretive life, with just a few public appearances and a home high on a hill near the Swiss village of Rüschlikon, a 15-minute drive from Zurich.

So Glasenberg, pushed by his advisors, briefly emerged from his corporate cocoon to speak publicly and sit for a handful of media interviews. He was not happy about it. After all, he had learned the business from mysterious oil trader Marc Rich.

The most open event hosting Glasenberg was a meeting of the Melbourne Mining Club held, oddly enough, in London. Conducted under a marquee at Lord’s Cricket Ground, the 600 people on hand heard the guest speaker talk forcefully about his business and private lives. It was perhaps fitting that he opened up to an Australian organization because, after growing up and starting his career in Johannesburg, he gained Australian citizenship during a two-year coal-trading assignment for Glencore in Sydney in the late 1980s.

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Xstrata, Mine Mill brace for possible job action – by Star staff (Sudbury Star – January 26, 2013)

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

It’s the yin-yang of contract negotiations. As bargaining committee members for Mine Mill Local 598/CAW and Xstrata Nickel met Friday to forge a new collective agreement, preparations were going on — on both sides — should those talks fail.

Residents of Falconbridge, where Xstrata Nickel’s Sudbury operations are headquartered, received letters in the mail from the union, asking for their “support, co-operation and patience should it be necessary.” The deadline for the current three-year contract between the miner and its union is Jan. 31. Local 598 has a 96% strike mandate from members should it need it at 12:01 a.m. Feb. 1.

Since talks began in December, both sides have said they have hopes of settling a new three-year deal. But in labour negotiations, it’s customary for both sides to prepare for the worst while hoping for the best.

Anne Marie MacInnis, vice-president of Mine Mill 598/CAW, is strike co-ordinator for the local. She was awaiting delivery Friday afternoon of a 10-by 44-foot strike trailer to be placed on city property in front of Xstrata Nickel’s operations.

Schedules for picket duty were also being drafted, arrangements were being made to set up accounts to purchase food and gasoline, and other strike-related actions were being planned.

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Xstrata Copper in Timmins extends support for sturgeon restoration biodiversity initiative

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.

Ontario Mining Association member Xstrata Copper’s Kidd Operations in Timmins has committed $21,000 to the Wintergreen Fund in support of the Mattagami River Sturgeon Restoration Project. “We are committed to supporting sustainable environmental projects, such as this one, that address identified needs and bring together community partners with common goals,” said Tom Semadeni, General Manager of Xstrata Copper’s Kidd Operations.

This contribution extends Kidd Operations support of the sturgeon initiative through to 2014. The funding will be used to acquire stationary monitors, nets, transmitters and other fish monitoring equipment. Along with the financial support, Kidd Operations will continue to provide in-kind donations of helicopter and personnel time for sturgeon habitat mapping and monitoring.

The Mattagami River Sturgeon Restoration Project began in 2002 in efforts to re-establish Lake Sturgeon in the local watershed. A once large population of Lake Sturgeon had been reduced significantly due to overfishing, log drives, habitat fragmentation caused by the construction of hydro-electric dams and to a lesser degree pollution. This project’s efforts have provided valuable data on the size and location of the fish population, where they gather to breed and how the river environment can be improved to encourage reproduction.

Lake Sturgeon are descendants of a prehistoric fish going back to the Mesozoic Era (dinosaur age). The fish appear to be much the same today as 100-million-year-old fossils, which have been found.

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[Timmins] Xstrata metallurgical site remediation underway – by Liz Cowan (Northern Ontario Business – January 22, 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.

Following 2020, it may be difficult to tell what once stood at the Kidd Metallurgical (Met) site in Timmins. Since copper and zinc smelting and refining operations came to an end in 2010, remedial and reclamation work has been ongoing at the site.

Xstrata Copper moved those operations to its Horne smelter in Rouyn, Que., and more than 650 employees lost their jobs. However, the concentrator remains at the site and about 220 are still employed.

The Kidd concentrator produces copper and zinc concentrates and treats all ore from the Kidd Mine. The remaining Met site operations will close once the Kidd Mine ceases operations, destined for 2020. Then, a remedial project will be undertaken for the remaining facilities at the Met site.

Since 2010, about 75 per cent of the plant remained empty and the company, as part of its permit requirements, had to initiate a reclamation project to deal with that portion.

“We removed all the infrastructure and took down a large amount of (empty) buildings,” said John Stroiazzo, manager of projects and closed sites for Xstrata. “The electrical power line and the water pipes, and everything that serviced the facility were removed. It took about 12 to 14 months to remove all of that.”

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All change at the top – Top global mining CEOs an endangered species – by Lawrence Williams (Mineweb.com – January 17, 2013)

http://www.mineweb.com/

Nearly all the world’s top industrial and gold mining companies have been, or are in the process of, changing their CEOs. What impact will this have on future metals production?

LONDON (MINEWEB) – Rio Tinto’s Tom Albanese is the latest victim of rapidly shrinking endangered species, the major mining CEO.

It may have taken almost 6 years but, the primary reason for the departure was the mega-miner’s foray into aluminium with the takeover of Alcan in 2007, just ahead of the big commodity price collapse of 2007/2008.

Aluminium has never fully recovered from that and at last Rio has taken the decision to write off $10 billion against the fall in value of one of the world’s biggest aluminium producers.

Albanese might have survived this on its own, but the recent $3.5 billion purchase of Mozambique coal developer, Riversdale, just. two years ago, which is now being almost entirely written down in Rio’s books was just too much for the company’s board and shareholders to live with. Albanese had to go

But Albanese is not alone. Of the world’s 10 largest mining companies, eight CEOs have been pushed, resigned, or are at least rumoured to be leaving. Look at the list: Top global miner BHP is reported in the Australian press to be seeking a successor to CEO, Marius Kloppers;

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[Xstrata Nickel] Mine Mill votes to strike – by Jonathan Migneault (Sudbury Star – January 17, 2013)

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

Members of the Canadian Auto Workers Mine Mill Local 598, which represents about 900 Xstrata Nickel miners in Sudbury, voted 96% in favour of a strike mandate if a new contract is not negotiated by Jan. 31.

The union members were also 100% in favour of re-opening their personal strike funds in the event they need to subsidize strike pay. The strike vote was held Wednesday during three meetings of union members.

Richard Paquin, Local 598’s president, said the union’s intent is not to go on strike, but to negotiate a deal before the Jan. 31 deadline. He said the strike mandate will give union negotiators more bargaining power during contract talks.

“We’re optimistic we can get a new contract,” Paquin said. “We have the last three tentative agreements that we did with them, so we’re confident we can do it again.”

Xstrata Nickel’s Sudbury operations consist of the Nickel Rim South Mine, Fraser Mine, a mill and a smelter. Nickel and copper are the primary metals produced in Sudbury, but cobalt and precious metals, such as platinum, are also mined.

Paquin did not disclose details about ongoing negotiations, but did say the two sides have discussed language issues with Xstrata, but have yet to tackle monetary issues.

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OMA NEWS RELEASE: Xstrata Nickel executives recognized as two of Canada’s top business women

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.

Dominique Dionne, Vice President Corporate Affairs for Ontario Mining Association member Xstrata Nickel, has been recognized as one of Canada’s leading businesswomen along with her colleague Sepanta Dorri, General Manager Business Development at Xstrata Nickel. Ms Dionne received the RBC Champions Award in the 2012 Canada’s Most Powerful Women: Top 100 program.

Ms Dorri was named to the 2012 Canada’s Most Powerful Women: Top 100 program in the Trailblazers and Trendsetters category. The OMA joins in congratulating both executives for this achievement. These honours were officially presented at the 10th annual ceremony run by the Womens’s Executive Network (WXN). It recognizes female business leaders in the private, public and not-for-profit sectors. WXN started 15 years ago and it has approximately 18,000 members.

“Dominique has relentlessly pursued her goal to develop the next generation of female leaders in the mining sector by championing Xstrata’s support of programs to expand opportunities for women within our industry,” said Ian Pearce, Xstrata Nickel Chief Executive Officer in a letter to staff.

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