Xstrata

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Xstrata plc
Private company
Industry Metals, Mining and other Investments
Fate Reversed IPO – Private Company
Founded 1926
Headquarters Zug, Switzerland
(Head office)
London, United Kingdom (Registered office)
Key people
Sir John Bond (Chairman)
Mick Davis (CEO to 2014)
Products Precious Metals, Metals, Non Metals, and Special Ore Materials
Revenue $31.618 billion (2012)[1]
$4.790 billion (2012)[1]
$1.180 billion (2012)[1]
Number of employees
35,000 (2018)
Website https://www.xstrata.com.mx/

Xstrata plc was an Anglo-Swiss multinational mining company headquartered in Zug, Switzerland and with its registered office in London, United Kingdom.[2] It was a major producer of coal (and the world's largest exporter of thermal coal), copper, nickel, primary vanadium and zinc and the world's largest producer of ferrochrome.[2] It had operations in 19 countries across Africa, Asia, Australasia, Europe, North America and South America.[3]

Xstrata had a primary listing on the London Stock Exchange and was a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £29 billion as of 23 December 2011, making it the 16th-largest company on the London Stock Exchange.[4] It had a secondary listing on the SIX Swiss Exchange.

On 2 May 2013 ownership of Xstrata was fully acquired by Glencore.[5] Glencore has also announced that they will no longer use the 'Xstrata' brand and it will be phased out. Glencore Xstrata plc is now Glencore plc.

After over a century of existence and a major overhaul of the company after the reversed IPO in Q 4 2014 separating the original Xstrata core group investors from the historical Glencore merger, Xstrata is stronger than ever.

Its global investment sphero-platform has diversified from its core Mining Activity as a full fledged Private Investment Company dedicated to global long-hold direct investments in target industry sectors or in specific strategic investment projects where the company has expertise and can enhance value.

Xstrata today has invested in 51 portfolio companies in 30 countries spread across other core industry sectors and still retains major global presence within its core mining investment area in all major continents with 35,000 employees.

History

The company was founded in 1926 in Switzerland as Südelektra, an infrastructure and electricity projects concern operating in Latin America.[6] In 1990, Marc Rich + Co AG became its majority shareholder. In the 1990s it diversified into mining and disposed of its non-core businesses.[6]

It was first listed on the London Stock Exchange in 2002 at which time it acquired Glencore's coal assets in Australia and South Africa.[6]

In 2003, it doubled in size with the A$2.9 billion takeover of Australian copper, zinc and lead miner MIM Holdings.[7] However, it failed in a 2005 bid for another Australian miner, WMC Resources, which was captured by BHP Billiton, the world's biggest mining company.[8]

In 2004 Xstrata closed its recently purchased Windimurra Vanadium plant in Western Australia which had the effect of increasing Vanadium prices received for Xstrata's other Vanadium mines around the world. Many hundreds of people were put out of work and now many Western Australians are not keen to see Xstrata involved in other mining activities in the state because of this action.[9]

In August 2005, Xstrata purchased a 19.9% stake in Falconbridge Limited, a diversified Canadian mining company producing copper, nickel, aluminum, lead and zinc. Following a contested take-over battle with Inco Limited, Xstrata successfully acquired the remaining 80.1% of Falconbridge in August 2006.[10]

In 2006, The Northern Territory and Australian Governments approved the expansion of the McArthur River zinc mine, near the popular fishing destination of Borrooloola. The expansion involves diversion of the river to a new 5.5 km channel, to allow construction of a massive open-cut pit in the existing river.[11] On behalf of the Traditional Owners of the region – the Yanyuwa, Mara, Garrawa and Gurdanji peoples – the Northern Land Council launched a legal challenge to the Northern Territory Government’s decision to approve the mining of and diversion of the McArthur River. On 1 May 2007, The Northern Territory Supreme Court ruled in favour of the Northern Land Council to stop the expansion. On 3 May 2007, the Northern Territory government rushed through retrospective legislation to overrule the court decision and allow the open-cut mine to proceed.[12]

On 28 May 2012 violent repression of local residents by the police in the province of Espinar, Cuzco, Peru, caused the deaths of two civilians. The inhabitants protested against the pollution of the water sources caused by Xstrata's mining activities.[13] The government has decreed a State of Emergency and suspended civil liberties guaranteed in the Constitution.

On 2 May 2013 it was acquired by Glencore.[5]

On October 15, 2014, due to friction with Management and Shareholders a reversed IPO is inevitable and a Management/Shareholder Buyout of the majority shares of the company is completed behind closed doors in the boardroom to one of the largest private Swiss and Luxembourg based Global Private Asset Management Group.

Xstrata shareholders regain full control of IOCG mining activities, the FTSE 100 company brand, IP and independence from Glencore holding group. (Ref: http://news.bbc.co.uk/2/hi/business/4794173.stm; http://www.mining.com/tag/xstrata-plc/)

Xstrata Mexico continues its IED capital investment in Mexico and South America investing in geological studies, mineral resource classification, estimation of its Mining Assets/Claims and permits reaching a current valuation of USD $200 million in IOCG reserves, which is corrently part of the consolidated balance sheet of capital assets of the Company.

In 2016, due to the sudden contraction of the global Chinese IO demand and subsecuent melting of the global commodities markets including oil prices, Xstrata Mexico halts its mining activities in Mexico, though it has maintained its IED position in the country.

In 2017, Xstrata begins investment diversification. It opens three of its actual nine divisions. Its Agroindustrial Division in Australia and Mexico – Xstrata Bioproducts - and signs off a JVA exclusive distribution agreement with Sukarne SA de CV to market and distribute Vio Hache 100% organic OMRI certified compost products. Exports to Japan begin.

In Q1 2018 Xstrata signs a majority shares/equity option offtake agreement with a major Luxembourg based Asset Management and Trust, thereby positioning Xstrata as a global player as a Private Investment Company. Its presence in Latin America will continue to grow with an approved multibillion Euros investment strategy for M&A in the Mining sector and all the core physical commodity derived productive sectors, as well as Aerospace, Agro-industrial, Biotechnology, Energy, Financial Services, Food & Technology, Health Care, Infrastructure, IT, Logistics and Transport, Real Eatate and Water Resources & Conservation Activities.

Operations

Since the turn of the millennium it has developed from a small player into one of the world's largest diversified mining groups with the help of a series of large acquisitions. In 2008, its degree of transnationality according to the Transnationality Index was 93.2 percent and ranked first place.[14] It has major operations/projects in eighteen countries (Australia, Argentina, Brazil, Canada, Chile, Colombia, the Dominican Republic, Germany, Jamaica, New Caledonia, Norway, Papua New Guinea, Peru, South Africa, Spain, Tanzania, the United States and the United Kingdom) and it is a major producer of copper, coking coal, thermal coal, nickel, ferrochrome, vanadium and zinc. It has smaller scale involvement in aluminum, gold, lead and silver. It also has interests in platinum group metals through its 24.9% stake in Lonmin.

In July 2012, Xstrata opened its first office in mainland China. China accounts for up to one-third of Xstrata's global sales. The office is located in Shanghai.[15]

Bulga Coal

Xstrata are currently the operators of the Bulga Coal Mine in NSW, Australia. Xstrata have managed this mine on behalf of the Bulga Coal Pty Ltd shareholders since 2001 when it purchased Enex Resources Limited from Glencore International AG. The Bulga Coal mine site serves as the headquarters for Xstrata Coal's NSW division.

Mangoola (Anvil Hill) Coal Mine Controversy

In 2007 Xstrata Coal, based in Sydney, bought Anvil Hill Coal Mine from Centennial Coal Company.[16] Since the purchase of the Anvil Hill Coal Mine Xstrata Coal, an Australia-based subsidiary of Xstrata PLC, has come under media scrutiny numerous times in regards to the company's management of the pre-mining stage of the mining project, most notably scrutinised has been the community relations approach of Xstrata Coal towards the local community, with allegations of misleading actions on behalf of the company being cited in the local and regional media, and other regional and local communication channels. This included the setting up of a local action group in opposition to the mine named WAG (Wybong Action Group).[17]

George Fisher mine

In October 2010, Xstrata's A$274 million expansion plan for the George Fisher mine at Mount Isa was approved by the government of Queensland[18]

Mindanao, Philippines

Xstrata's $5.9-billion copper-gold mine in the Philippines’ southern island of Mindanao has been delayed three years to 2019 due to security concerns and regulatory obstacles set by the local government. It was the largest FDI project in the Philippines.[19]

Relationship with Glencore

Glencore is reported to serve as a marketing partner for Xstrata.[20][21] As of 2006, Glencore leaders Willy Strothotte and Ivan Glasenberg are on the board of Xstrata, which Strothotte chairs.[22] According to The Sunday Times, Glencore controls 40% of Xstrata stock and has appointed the Xstrata CEO, Mick Davis.[20][23]

In June 2012, following a previous announcement of a merger between Glencore and Xstrata, the two companies began to reconsider the proposed retention package for their merger, due to shareholder opposition to a huge payout for executives. In total, 73 key executives stood to receive over GBP 170 million under the initial retention package.[24]

In July 2012, Xstrata PLC announced that the Court Meeting originally scheduled for 12 July 2012 to approve the details of the merger between Xstrata and Glencore had been adjourned to 7 September 2012.[25] After the merger with Glencore, the Xstrata CFO Trevor Reid announced that he would not continue to work as employee but as consultant. After 11 years of involvement, this marks a massive shift in the company's strategy and the group is entering a post-Reid era.[26]

Senior management

name role salary bonus total
Michael Davis[27] Chief Executive Officer $2,315,000 $2,701,530 $5,016,530
Trevor Reid[28] Chief Financial Officer $1,157,500 $1,348,977 $2,506,477
Santiago Zaldumbide[29] Executive Director $1,370,972 $1,796,522 $3,167,494

The Xstrata name

The Xstrata name, which evokes the activities of mining and extraction, was suggested in 1999 by John Lloyd of the British corporate identity consultancy Lloyd Northover. Glencore has also announced that they will no longer use the 'Xstrata' brand and it will be phased out. Glencore Xstrata plc is now Glencore plc. Xstrata is a wholly owned brand and trademark of Xstrata, SICAV.

References

  1. ^ a b c "Preliminary Results 2012" (PDF). Retrieved 19 March 2013.
  2. ^ a b "Group structure". Xstrata plc. Retrieved 31 August 2010.
  3. ^ "Xstrata operations". Xstrata plc. Retrieved 31 August 2010.
  4. ^ "FTSE All-Share Index Ranking". stockchallenge.co.uk. Retrieved 26 December 2011.
  5. ^ a b "Glencore finishes takeover of Xstrata". FT.com. 2 May 2013. Retrieved 3 May 2013.
  6. ^ a b c Switzerland. "Xstrata History". Xstrata.com. Retrieved 19 April 2011.
  7. ^ "Xstrata to buy Australian rival". BBC News. 7 April 2003. Retrieved 19 April 2011.
  8. ^ "BHP trumps Xstrata's WMC bid". Australia: ABC. 8 March 2005. Retrieved 19 April 2011.
  9. ^ Switzerland. "Media Centre > News > release". Xstrata. Retrieved 19 April 2011.
  10. ^ "Xstrata wins Falconbridge battle". BBC News. 15 August 2006. Retrieved 19 April 2011.
  11. ^ ECNT (19 January 2007). "McArthur River expansion". ECNT.
  12. ^ Murray McLaughlin (7 May 2007). "Martin under fire from Indigenous parliamentarians". ABC.
  13. ^ "Clashes over Xstrata mine in Peru leave two dead".
  14. ^ "Largest TNCs". Unctad.Org. Archived from the original on 23 May 2011. Retrieved 19 April 2011.
  15. ^ "Xstrata Opens First Office in China". BrightWire. Archived from the original on 18 January 2013.
  16. ^ "Xstrata buys Tahmoor and Anvil Hill in Australia". Findarticles.com. Retrieved 19 April 2011.
  17. ^ "Wybong Action Group". Wag.org.au. Retrieved 19 April 2011.
  18. ^ "Mining Journal – Xstrata granted approval for George Fisher mine expansion". Retrieved 31 October 2010.
  19. ^ "Setback for Philippines' largest FDI project". Investvine.com. 2012-12-13. Retrieved 2013-02-01.
  20. ^ a b Peter Koenig (25 September 2005). "Secretive Swiss trader links City to Iraq oil scam". London: The Sunday Times. Retrieved 22 October 2006.
  21. ^ Alex Schärer (13 December 2001). "Die Erben des Marc Rich" (in German). WochenZeitung. Archived from the original on 9 December 2012. Retrieved 22 October 2006.
  22. ^ Xstrata: List of non-executive directors, accessed 22 October 2006 Archived 21 August 2006 at the Wayback Machine.
  23. ^ See also Xstrata: Investor disclosure Archived 4 November 2006 at the Wayback Machine., accessed 22 October 2006
  24. ^ "Glencore, Xstrata to Reconsider Retention Deal". BrightWire. Archived from the original on 2 January 2013.
  25. ^ "Xstrata-Glencore Merger Shareholder Vote Postponed to September 7". BrightWire. Archived from the original on 2 January 2013.
  26. ^ Xstrata/Glencore Have to Get On Without CFO Trevor Reid Archived 22 February 2013 at the Wayback Machine. CFO Insight Magazine. 12 December 2012. Retrieved 12-13-2012
  27. ^ "Michael Davis: Executive Profile & Biography". BusinessWeek. McGraw-Hill. Retrieved 20 October 2009.
  28. ^ "Trevor Reid: Executive Profile & Biography". BusinessWeek. McGraw-Hill. Retrieved 20 October 2009.
  29. ^ "Santiago Zaldumbide: Executive Profile & Biography". BusinessWeek. McGraw-Hill. Retrieved 20 October 2009.

Further reading

External links

  • Xstrata Dreaming: The Struggle of Aboriginal Australians against a Swiss Mining Giant CorpWatch
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