Human Rights Online Philippines

SOUTHERN COMFORT: SMI and the merger between Glencore and Xstrata
By Edwin G. Espejo
February 7, 2012

GENERAL SANTOS CITY (MindaNews/06 February) — Although its has been the buzz in the international mining community for some time, the proposed ‘merger of equals’ between Glencore International and Xstrata Plc is reaching feverish pitch this week as it appears the union is heading towards fruition except for some issues on premiums.

Under the merger proposal, Glencore and Xstrata could end up among the world’s top mining companies in the world as the deal is reportedly worth well over US$80 billion. The merger will reportedly be announced next week, according to the latest development.

The deal will be the largest of such magnitude since Rio Tinto of Brazil took over Alcan in 2007. The merged company is poised to become the third largest mining corporation in the world, next only to BHP Billiton and Rio Tinto.

Glencore is one of the world’s largest integrated producers and commodities trading firms but is also into mining while Xstrata is the world’s fourth largest producer of copper.

It owns 34 percent of Xstrata Plc.

Both companies are no strangers in the Philippine mining industry.

A merger between the two giant companies will have immediate and strategic impact on the mining sector in the country as SMI will be in the better position to wrest control over copper production and trading in the country. It could also result into Xstrata Plc finally taking full and 100 per cent control of SMI as Glencore could end up buying SMI minority shareholder Indophil Resources NL which owns the rest of the 37.5 per cent of the Tampakan mining company.

Read full article @ www.mindanews.com