Glencore – Page 48 – Republic of Mining

Glencore merger gets nod from Xstrata board – by Eric Reguly (Globe and Mail – October 2, 2012)

October 2, 2012

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 — The biggest takeover of the year looks set to go ahead after Anglo-Swiss mining giant Xstrata PLC recommended that its shareholders vote in favour of Glencore International’s overhauled merger proposal.

The deal, which was held up for half-a-year because of fights over price and executive pay, would value the combined group at about $80-billion (U.S.), based on current trading prices. It would vault the new company into mining’s super leagues, where it would compete with BHP Billiton, Rio Tinto, Vale and Anglo American. Xstrata boss Mick Davis and his Glencore counterpart, Ivan Glasenberg, have made no secret of their desire to own Anglo American; Xstrata tried to buy Anglo in 2009, but was rejected.

While the Xstrata-Glencore merger will almost certainly go ahead, risks abound. Glencore is primarily a trading and logistics company and Xstrata is a miner – it is the biggest exporter of thermal coal. Putting the two together is bound to create some cultural and operational tensions, all the more so since the new group is to be run by Mr. Glasenberg even though Glencore is smaller than Xstrata.

The bigger question is the enduring strength of the commodities “supercycle” as China’s growth rates come down. Mr. Davis’s bet that commodities were on a “stronger for longer” run certainly proved true in the last decade, when he built Xstrata from virtually nothing, but prices for some metals have dropped this year amid uneven demand.

Xstrata board backs Glencore’s $33bn takeover offer – by Firat Kayakiran (Mineweb.com – October 1, 2012)

October 1, 2012

www.mineweb.com

Xstrata’s board members have backed Glencore’s revised offer after gaining assurances over the combined company’s board and decoupling approval of incentive payments from a vote on the offer.

LONDON (BLOOMBERG) – Xstrata Plc (XTA)’s board recommended shareholders back a $33 billion sweetened takeover offer by Glencore International Plc (GLEN) after gaining assurances on board composition and delinking votes on the bid and bonus payments.

Shareholders will be asked to consider two resolutions: one to approve the takeover along with 144 million pounds ($232 million) of retention bonuses and a second that excludes the pay question, Xstrata said in a statement today. This means the deal can proceed even if the incentive payments are rejected.

The recommendation brings Glencore’s billionaire Chief Executive Officer Ivan Glasenberg one step closer to his goal of creating the world’s fourth-largest mining company. The combination, five years in the making, would couple Glencore’s global trading operations with Xstrata’s coal, copper, and zinc production, establishing a resources group with about 130,000 employees in more than 40 countries.

Glencore firms up Xstrata bid – by Clara Ferreira-Marques and Dinesh Nair (Reuters/Sudbury Star – September 10, 2012)

September 10, 2012

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

LONDON — Trader Glencore, hammering out a revised $36-billion bid for miner Xstrata in intense weekend negotiations, is set to detail its new offer to the market as early as Monday, days after proposing 11th-hour changes to save the deal.

Sources familiar with the deal said commodities trader Glencore, keen to clarify its own position but also under pressure from Xstrata and U.K. regulators, would publish details of the higher offer early next week.

Two sources said the new, firm, offer was expected on Monday. The firm offer will then be studied by Xstrata’s board and non-executive directors — who on Friday questioned Glencore’s new proposal and said they required more details in order to decide on whether or not to recommend it. The Xstrata board will also discuss the proposal with top independent shareholders, one other source familiar with the deal said.

The deal has implications for Sudbury. Xstrata owns Xstrata Nickel, whose Sudbury operations consist of the Nickel Rim South Mine, Fraser Mine, a mill and a smelter. Nickel and copper are the primary metals, but cobalt and precious metals such as platinum are also produced. Xstrata employs about 1,000 people in the Sudbury area.

With Glencore deal on verge of collapse, Xstrata ponders growth options – by Clara Ferreira-Marque (Reuters/National Post – September 6, 2012)

September 8, 2012

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

LONDON — With Glencore’s US$34-billion takeover bid set to collapse on Friday, Xstrata boss Mick Davis will have to woo back disgruntled shareholders in the miner and push ahead alone with ambitious growth plans.

Chief Executive Davis aims to steer the fourth-largest diversified miner from its acquisition-fuelled first decade into a phase of organic, or self-generated, growth, which the miner hopes will boost volumes by 50% by the end of 2014 and cut average operating costs by a fifth.

The broad, bespectacled South African who has led Xstrata for the past decade has major hurdles ahead – unhappy minority shareholders demanding changes at the top and an even unhappier situation in Xstrata’s platinum investment Lonmin, the South African miner hit by a strike and soaring costs.

Davis will also have to find new working relationships with 34-percent shareholder Glencore – increasingly a competitor as the commodity trader’s mining presence grows – and with Qatar.

Glencore’s friendly bid for Xstrata turns hostile – by Peter Koven (National Post – September 7, 2012)

September 8, 2012

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

The biggest takeover bid of the year is shaping up as one of the most unusual, as a battle over money and control have changed the face of it overnight.

What started as a friendly takeover of mining giant Xstrata PLC by Glencore International PLC has turned into an apparent hostile bid, and Xstrata is threatening to reject it even though the new offer price is higher than the one it previously accepted.

The dramatic turn of events began Thursday night, when Glencore chief executive Ivan Glasenberg held a secret meeting with Qatari Prime Minister Hamad bin Jassim al-Thani. According to the Financial Times, Tony Blair brokered the deal that brought them together.

Glencore thought it locked up Xstrata back in February, when it offered 2.8 of its shares for each Xstrata share. But that plan was thrown into doubt when Qatar Holdings, the country’s sovereign wealth fund, acquired a large minority stake in Xstrata and pushed for a higher price.

Glencore sweetens Xstrata bid as shareholder vote delayed – by Pav Jordan (Globe and Mail – September 7, 2012)

September 7, 2012

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.

Global commodities giant Glencore International PLC has sweetened its offer to acquire Swiss miner Xstrata PLC, bowing to pressure from a key shareholder who said the initial $34-billion was too low.

Xstrata, which is 34-per-cent owned by Glencore, said the new proposal envisaged an increase to the merger ratio to 3.05 Glencore shares for every Xstrata share, from a previous merger ratio of 2.8 shares.

“The board of Xstrata PLC has received a proposal from Glencore International PLC to amend the terms of the merger of Glencore and Xstrata,” Xstrata said in a statement.

Glencore’s offer to acquire Xstrata hit a road block in recent months after one of its top shareholders, Qatar Holdings, a global investment house founded by the Qatar Investment Authority, said the offer was too low.

UPDATE 2: Glencore ups offer for Xstrata to $37bn – by Clara Ferreira-Marques and Emma Farge (Mineweb.com – September 7, 2012)

September 7, 2012

www.mineweb.com

Glencore is now proposing to offer 3.05 new shares for every Xstrata share, with Ivan Glasenberg as the new CEO in place of Xstrata’s Mick Davies.

LONDON/ZUG (Reuters) – Commodity trader Glencore has raised its offer for miner Xstrata to salvage a bid, now worth about $37 billion, that appeared to be heading for the rocks after Xstrata shareholder Qatar held out for more.

Xstrata said Glencore was now proposing to offer 3.05 new shares for every Xstrata share, up from 2.8, with Glencore Chief Executive Ivan Glasenberg to become CEO of the combined group, instead of Xstrata boss Mick Davis as originally envisaged.

Xstrata said Glencore was also suggesting a possible change to the structure of the deal that could allow it to pass more easily with a simple majority of shareholders.

Glencore’s bid had been teetering on the brink of collapse after Xstrata’s second-largest shareholder, Qatar, with 12 percent, said it would vote against the deal unless it was improved.

A failed deal with Glencore means a lonely road to growth for Xstrata – by Clara Ferreira-Marques (Mineweb.com – September 6, 2012)

September 6, 2012

www.mineweb.com

With Glencore’s $34 billion takeover bid set to collapse on Friday, Xstrata boss Mick Davis will have to woo back disgruntled shareholders to push ahead a solitary growth plan

LONDON (Reuters) – With Glencore’s $34 billion takeover bid set to collapse on Friday, Xstrata boss Mick Davis will have to woo back disgruntled shareholders in the miner and push ahead alone with ambitious growth plans.

Chief Executive Davis aims to steer the fourth-largest diversified miner from its acquisition-fuelled first decade into a phase of organic, or self-generated, growth, which the miner hopes will boost volumes by 50 percent by the end of 2014 and cut average operating costs by a fifth.

The broad, bespectacled South African who has led Xstrata for the past decade has major hurdles ahead – unhappy minority shareholders demanding changes at the top and an even unhappier situation in Xstrata’s platinum investment Lonmin, the South African miner hit by a strike and soaring costs.

Qatar’s Rejection Leaves Glasenberg to Decide on Xstrata – by Jesse Riseborough, Firat Kayakiran and Matthew Campbell (Blomberg Markets Magazine – Aug 31, 2012)

August 31, 2012

http://www.bloomberg.com/

Ivan Glasenberg, Glencore International Plc (GLEN)’s billionaire chief executive officer, has a week to decide on his biggest bet yet — whether to raise his $31 billion offer for Xstrata Plc (XTA) or see his five-year effort to create the fourth-biggest mining company disintegrate.

Qatar’s sovereign wealth fund, which has 12 percent of Xstrata, ruled out accepting Glasenberg’s current bid yesterday. That means Glencore’s takeover probably will fail unless Glasenberg raises the offer in time for a shareholder vote scheduled for Sept. 7.

Glasenberg, a former accountant and coal trader who owns 16 percent of Baar, Switzerland-based Glencore, has worked there since 1984 and became CEO in 2002. He will make the final decision and will rely less on advisers as the deal nears conclusion, a person familiar with the matter said, declining to be identified because he wasn’t authorized to speak about it.

“He’s a preeminent trader, and don’t traders always leave it until the last minute?” Peter Davey, head of metals and mining research at Standard Bank (SBK) Group Ltd. in London, said by phone. “He’s never going to disclose his hand upfront. That’s how he makes money. It leaves the door open for him to try a better offer.”

Anglo CEO [Cynthia Carroll] Doubles Down on New Mines Amid Falling Demand – by Jeremy Kahn (Bloomberg Markets Magazine – September 2012)

August 31, 2012

http://www.bloomberg.com/

Driving northeast from Santiago, the road corkscrews toward the shark’s-grin skyline of the Andes Mountains. In winter, Santiago’s smart set plies this route, heading for virgin-powder days and pisco-sour nights at La Parva ski resort. Most have no inkling that in a high mountain valley just over the ridgeline, excavators the size of houses have sculpted the mountainside into a steeply terraced pit 1,800 feet deep, Bloomberg Markets magazine reports in its September issue.

This is Los Bronces, one of the world’s richest copper mines. Anglo American Plc (AAL), the London-based company that owns Los Bronces, spent $2.8 billion from 2007 to 2011 to double the size of the mine. And Los Bronces is just one of four megaprojects that Anglo Chief Executive Officer Cynthia Carroll has initiated or pushed through construction since she took over in 2007 — each representing a wager in excess of $1 billion on the continued rise of China, India and other emerging markets.

Los Bronces is also at the center of a legal battle between Anglo and Codelco, the Chilean state-owned mining company. The dispute — over whether Anglo can block Codelco from exercising an option to buy half of Anglo’s Chilean subsidiary — has spooked Anglo investors and weighed on the company’s share price, which dropped more than 15 percent from the time the controversy erupted in October to August 8.

Glencore/Xstrata deal on the brink of collapse as deadline passes – by Clara Ferreira-Marques and Sinead Cruise (Mineweb.com – August 24, 2012)

August 24, 2012

www.mineweb.com

Glencore’s proposed takeover of Xstrata came a step closer to collapse Friday, as the company looked set to let slide an informal deadline for it to raise its offer and yield to rival shareholder Qatar.

LONDON (Reuters) – Glencore’s proposed $30 billion takeover of Xstrata came a step closer to collapse on Friday, as the commodities trader looked set to let slide an informal deadline for it to raise its offer and yield to rival shareholder Qatar.

While Friday is not the final death knell for one of the largest ever proposed deals in the sector, analysts, investors and sources involved in the talks said the fact Glencore and Qatar continued to stare each other down – with only two weeks to go before shareholders vote – had put the deal on the brink.

“It wouldn’t be illogical to say this is 10 percent happening, 90 percent not happening,” one source involved in the negotiations said. “If you were laying bets, you’d have to say this isn’t going anywhere. It is not clear what the Qatari game is.”

Biodiversity initiative: Copper mine helps restore sturgeon population in Timmins river

August 22, 2012

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 Canada, Kidd Operations (Xstrata) through its financial and in-kind support of the Mattagami Sturgeon Restoration Project is giving new life to a fish species designated as of “special concern” by the province. Indications are that Xstrata, in partnership with the Ministry of Natural Resources, Ontario Power Generation, Timmins Fur Council and Club Navigateur, is experiencing success in re-establishing the lake sturgeon population in a section of the Mattagami River watershed.

Lake sturgeons 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. The Mattagami River flows north through Timmins into the James Bay drainage basin, which is part of the lake sturgeon habitat.

This fish, due to habitat loss and over fishing, had disappeared from a section of the Mattagami River between two hydro dams. To help re-establish the species, 50 adult sturgeons were transferred back into this habitat in 2002. Thirteen out of this original group of fish were marked with radio transmitters to monitor movement and potential spawning areas.

Glencore says $30bn Xstrata deal “not a must-do” – by Clara Ferreira-Marques (Mineweb.com – August 21, 2012)

August 21, 2012

www.mineweb.com

CEO Ivan Glasenberg said Tuesday the $30 billion bid for Xstrata is not a must-do deal, strongly suggesting it will not yield to key shareholder Qatar’s demands for an improved offer.

LONDON (Reuters) – Glencore’s $30 billion bid for miner Xstrata is not a “must-do deal” its chief executive said on Tuesday, in making the company’s strongest suggestion yet that it will not yield to key shareholder Qatar’s demands for an improved offer.

Ivan Glasenberg, speaking after the commodities trader reported a smaller than expected drop in its first-half profit, expressed exasperation with Qatar Holding, which has been in a stand-off with Glencore since the sovereign wealth fund surprised the market by demanding an improvement to Glencore’s offer of 2.8 new shares for every Xstrata share.

Qatar has increased to 12 percent a less than 3 percent stake in Xstrata since the all-share bid was announced earlier this year, less than Glencore’s own 34 percent holding but enough to block the takeover under the current deal structure.

Vale says ‘no plans’ to shut down operations – by Carol Mulligan (Sudbury Star – August 20, 2012)

August 20, 2012

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

As senior mining analyst at Salman Partners, an investment dealer, Raymond Goldie keeps a close eye on the nickel industry. But he’s finding it difficult to keep tabs on Vale, one of the world’s largest nickel producers.

That being said, Goldie is predicting Vale could be planning a production shutdown because of the low price of nickel. Nickel has fallen to below $7 a pound, something that could prompt other companies such as Xstrata Nickel and Norilsk to cease production for awhile as well, he said.

Vale spokeswoman Angie Robson said a planned maintenance shutdown is now underway at the company’s Greater Sudbury operations. Robson said the company has no other plans. “We don’t speculate on rumours, but there are no plans to shut down operations,” she said.

Goldie and other mining analysts who used to follow the former Inco Ltd. closely are finding it more difficult to do that now that it’s owned by the Brazil-based mining giant.

Glenecore-Xstrata a possible Vale suitor? – by Harold Carmichael (Sudbury Star – August 18, 2012)

August 18, 2012

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

Should Vale put its base metals division up for sale, there would likely be only one buyer with deep enough pockets – the soon-to-be-merged Xstrata and Glencore.

“If that merger goes through, the merged Xstrata/Glencore International plc would be a real huge entity,” mining analyst Stan Sudol said. “Certainly, they could afford to buy the base metal assets of Vale.

“It’s a merger the Sudbury Basin would welcome. There are enormous amounts of synergy that couldn’t be realized because of it being two entities. Ninety-five per cent of the area’s nickel operations would be unified.”

Six years ago, the former Inco and the former Falconbridge held merger discussions. If that had happened, most of Sudbury’s mining, milling and smelting operations would have been owned by one company.