ESKOM and the National Union of Metalworkers of South Africa (Numsa) have been granted the right to intervene in the Competition Tribunal’s hearings next week on the merger of the world’s largest commodity trader, Glencore, and mining group Xstrata.
Eskom has proposed that the tribunal impose conditions on the merger that could include measures such as ensuring the ratio of exports to domestic coal supply be kept constant after the merger, and that the merging parties agree to negotiate in good faith on long-term coal-supply contracts as these expire.
The utility says it does not want to stand in the way of the merger, but has to raise its concern about the future supply of coal for the domestic market.
Public hearings on the merger start on Monday.
The company says it has a public mandate to supply electricity to the entire country and is dependent on the right grade of coal at the appropriate time and at an affordable price to be able to deliver on its mandate.
In the absence of industrial policy that provides for the security of domestic supply before exports, the merger highlights Eskom’s vulnerability.
Eskom spokeswoman Hilary Joffe says: “The merged entity would account for approximately 15% of Eskom’s coal supply, with Glencore and Xstrata accounting for the bulk of the supply to the Majuba and Hendrina power stations and supplying smaller quantities to Duvha, Komati, Arnot and Matla power stations.”
Although it has secured the majority of its supply needs until 2018, Ms Joffe says Eskom needs to raise its concern about supply security beyond that.
Eskom indicated that it would propose additional conditions if necessary.
Xstrata is the world’s largest exporter of the type of coal used by power stations, and all of its mines and plants are in South Africa.
Glencore holds almost 34% of Xstrata and after this transaction — valued at $80bn — is approved, the miner will become a wholly owned subsidiary of Glencore.
It currently produces 27.4-million tons of saleable coal a year in South Africa, of which almost 30% is exported.
Source: Business Day
Showing posts with label Xstrata. Show all posts
Showing posts with label Xstrata. Show all posts
Friday, December 7, 2012
Zuma on nationalisation and working with Ramaphosa
PRESIDENT Jacob Zuma has welcomed the prospect of working with businessman Cyril Ramaphosa as his deputy, saying "it would not be the first time" that he has worked with the man who was once tipped to take over from Nelson Mandela as president of the African National Congress (ANC).
Mr Zuma is set to be re-elected to lead the ANC at the party’s elective congress in Mangaung later this month. However, his current deputy, Kgalema Motlanthe — who has been nominated by three provinces and the youth league for the position of party president — is likely to lose out to Mr Ramaphosa.
Mr Ramaphosa has garnered more than 1,800 nominations for the position of deputy president, while Mr Motlanthe has received about 160 nominations to retain his current position in the party.
In an interview with the UK’s Daily Telegraph published on Thursday, Mr Zuma praised Mr Ramaphosa when asked about the prospect of working with the business tycoon.
"It would not be the first time I worked with Cyril Ramaphosa. When he was the secretary-general, I was his deputy. So it would not be the first time, if he is elected," Mr Zuma told the paper.
He said that he was ready for a second term as president of the ANC.
The party’s elective conference in Mangaung will also be keenly watched by business — with the hope that economic policy will be clarified.
One of the burning issues up for possible debate is that of nationalisation of South Africa’s mines. Mr Zuma told the paper that the party would increase the pace of economic reform but would not "break" existing businesses to do so.
"Nationalisation is not the ANC policy," he said. "There are fundamental issues that need to be dealt with. It would be useful to do it quickly but we’ve got to balance things because we don’t want to break things in order to move forward."
Source: Business Day
Mr Zuma is set to be re-elected to lead the ANC at the party’s elective congress in Mangaung later this month. However, his current deputy, Kgalema Motlanthe — who has been nominated by three provinces and the youth league for the position of party president — is likely to lose out to Mr Ramaphosa.
Mr Ramaphosa has garnered more than 1,800 nominations for the position of deputy president, while Mr Motlanthe has received about 160 nominations to retain his current position in the party.
In an interview with the UK’s Daily Telegraph published on Thursday, Mr Zuma praised Mr Ramaphosa when asked about the prospect of working with the business tycoon.
"It would not be the first time I worked with Cyril Ramaphosa. When he was the secretary-general, I was his deputy. So it would not be the first time, if he is elected," Mr Zuma told the paper.
He said that he was ready for a second term as president of the ANC.
The party’s elective conference in Mangaung will also be keenly watched by business — with the hope that economic policy will be clarified.
One of the burning issues up for possible debate is that of nationalisation of South Africa’s mines. Mr Zuma told the paper that the party would increase the pace of economic reform but would not "break" existing businesses to do so.
"Nationalisation is not the ANC policy," he said. "There are fundamental issues that need to be dealt with. It would be useful to do it quickly but we’ve got to balance things because we don’t want to break things in order to move forward."
Source: Business Day
Wednesday, November 21, 2012
Davis ‘may lead exodus’ after Xstrata bonus snub
XSTRATA CEO Mick Davis might lead an exodus of the company’s top executives after its shareholders on Tuesday approved a $31bn merger with Glencore, but rejected a £144m management retention scheme that the miner’s directors had proposed.
The shareholder vote on the deal will bring the 10-month saga one step closer to its conclusion, uniting Xstrata’s output of copper, coal and nickel with Glencore’s marketing and trading expertise.
But the snubbing of the retention scheme prompted Xstrata chairman John Bond, who will be chairman of the combined group, to announce yesterday that he would step down once a replacement is found.
Mr Davis, who with his management team has grown Xstrata to a multibillion-dollar company from one worth just $500m in a decade, is expected to step down in six months in favour of Glencore’s Ivan Glasenberg.
Mr Davis has been tipped to replace outgoing Anglo American CEO Cynthia Carroll. He was asked during yesterday’s shareholder meeting in Zug, Switzerland, whether he would be starting another business or retiring.
"I have not yet decided what my future plans will be but certainly retirement will not be part of them," Mr Davis said.
The controversial management retention scheme for 70 top Xstrata managers was rejected by 78.4% of Xstrata shareholders voting on Tuesday.
Glencore Xstrata International, the new name for the company, will have interests in about 35 coal mines in Colombia, Africa and Australia, and account for about 10% of global seaborne exports of the fuel. It will be the world’s third-biggest producer of mined copper, the largest zinc miner and the biggest exporter of coal burnt by power stations.
The group will have about 11% of the 13-million-ton global zinc market and about 40% of the 1.9-million tons of the metal produced in Europe.
One large Xstrata shareholder, asset manager Knight Vinke, said at the meeting yesterday that it had no confidence in the "independence and robustness" of the board and had voted against the deal. "We are extremely concerned with regard to the ability of the board of the newly merged company to represent our interests," said David Trenchard, vice-chairman of Knight Vinke.
"Good governance must now take centre stage and we intend to broaden our discussions with fellow shareholders to ensure that this is the case."
But most Glencore shareholders backed the merger. At the meeting in Zug, which lasted just 12 minutes, over 99% of voting shareholders backed the deal.
The deal, announced in February, has already had more than its fair share of twists, with the original terms panned by shareholders — some of whom also took exception to retention payments for Xstrata executives.
Qatar’s sovereign wealth fund and Xstrata’s second-largest shareholder after Glencore said last week it would back the deal unreservedly. But the fund, which played a pivotal role, did not approve the controversial packages proposed for Xstrata’s key team.
In negotiations with Qatar, Mr Glasenberg insisted he become CE of the combined company rather than Mr Davis, who is expected to leave six months after the deal closes but can depart earlier if he wishes.
Glencore must also overcome European Commission concerns about potential competition problems the deal poses.
The trader has offered to sell Xstrata’s German zinc smelter, after its first solution was deemed insufficient by regulators.
Source: Business Day
The shareholder vote on the deal will bring the 10-month saga one step closer to its conclusion, uniting Xstrata’s output of copper, coal and nickel with Glencore’s marketing and trading expertise.
But the snubbing of the retention scheme prompted Xstrata chairman John Bond, who will be chairman of the combined group, to announce yesterday that he would step down once a replacement is found.
Mr Davis, who with his management team has grown Xstrata to a multibillion-dollar company from one worth just $500m in a decade, is expected to step down in six months in favour of Glencore’s Ivan Glasenberg.
Mr Davis has been tipped to replace outgoing Anglo American CEO Cynthia Carroll. He was asked during yesterday’s shareholder meeting in Zug, Switzerland, whether he would be starting another business or retiring.
"I have not yet decided what my future plans will be but certainly retirement will not be part of them," Mr Davis said.
The controversial management retention scheme for 70 top Xstrata managers was rejected by 78.4% of Xstrata shareholders voting on Tuesday.
Glencore Xstrata International, the new name for the company, will have interests in about 35 coal mines in Colombia, Africa and Australia, and account for about 10% of global seaborne exports of the fuel. It will be the world’s third-biggest producer of mined copper, the largest zinc miner and the biggest exporter of coal burnt by power stations.
The group will have about 11% of the 13-million-ton global zinc market and about 40% of the 1.9-million tons of the metal produced in Europe.
One large Xstrata shareholder, asset manager Knight Vinke, said at the meeting yesterday that it had no confidence in the "independence and robustness" of the board and had voted against the deal. "We are extremely concerned with regard to the ability of the board of the newly merged company to represent our interests," said David Trenchard, vice-chairman of Knight Vinke.
"Good governance must now take centre stage and we intend to broaden our discussions with fellow shareholders to ensure that this is the case."
But most Glencore shareholders backed the merger. At the meeting in Zug, which lasted just 12 minutes, over 99% of voting shareholders backed the deal.
The deal, announced in February, has already had more than its fair share of twists, with the original terms panned by shareholders — some of whom also took exception to retention payments for Xstrata executives.
Qatar’s sovereign wealth fund and Xstrata’s second-largest shareholder after Glencore said last week it would back the deal unreservedly. But the fund, which played a pivotal role, did not approve the controversial packages proposed for Xstrata’s key team.
In negotiations with Qatar, Mr Glasenberg insisted he become CE of the combined company rather than Mr Davis, who is expected to leave six months after the deal closes but can depart earlier if he wishes.
Glencore must also overcome European Commission concerns about potential competition problems the deal poses.
The trader has offered to sell Xstrata’s German zinc smelter, after its first solution was deemed insufficient by regulators.
Source: Business Day
Saturday, March 3, 2012
Xstrata: The world’s fourth largest diversified mining group
Xstrata is the world’s fourth largest diversified mining group. We are ranked among the top five producers of copper, export thermal coal, export coking coal, ferrochrome, nickel and zinc globally, and also have a growing platinum group metals business, iron ore projects and recycling facilities. Our operations and projects, which span 20 countries and employ more than 70,000 people, are supported by a small corporate centre split between the head office in Zug, Switzerland and an office in London. We are is listed on the London and Swissstock exchanges, with a market capitalisation of $54 billion, as at 03 March 2012.
We differentiate ourselves from our competitors and peers by devolving responsibility and authority to our individual commodity businesses. This creates a strong sense of local ownership which we believe ultimately benefits our operations. Our managers are empowered and incentivised to tackle and solve local challenges and seize opportunities when they arise.
At least 1% of Xstrata Group’s profits before tax is set aside every year to fund initiatives that benefit the communities in which we operate. We support local culture and arts projects, programmes to boost community development, enterprise and job creation,health and education initiatives and environmental schemes. We set aside $109 million in 2011,representing 1.3% of pre-tax profits, for these local projects, and have donated $102 million, including $2 million of value in-kind contributions, so far.
Source: Xstrata
We differentiate ourselves from our competitors and peers by devolving responsibility and authority to our individual commodity businesses. This creates a strong sense of local ownership which we believe ultimately benefits our operations. Our managers are empowered and incentivised to tackle and solve local challenges and seize opportunities when they arise.
At least 1% of Xstrata Group’s profits before tax is set aside every year to fund initiatives that benefit the communities in which we operate. We support local culture and arts projects, programmes to boost community development, enterprise and job creation,health and education initiatives and environmental schemes. We set aside $109 million in 2011,representing 1.3% of pre-tax profits, for these local projects, and have donated $102 million, including $2 million of value in-kind contributions, so far.
Source: Xstrata
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