Glencore Xstrata (GLCNF.PK) and Blackstone (BX) may bid for Rio Tinto's (RIO) 59% stake in Iron Ore of Canada, sources tell WSJ. RIO put the position up for sale earlier this year. Some say Blackstone is the more likely suitor given that Glencore is still busy integrating Xstrata. The Journal notes that mining companies are becoming "more cautious on bidding for new assets [as] investors demand restraint on spending [amid] falling commodity prices" (previous). Bankers say this has opened the door for private-equity.
Glencore (GLCNF.PK) completes its long-awaited merger with Xstrata to form the world's fourth biggest mining company and the world's biggest commodities trader. The combined company, to be called Glencore Xstrata, will start with a market cap of ~$76B. Glencore reportedly will lay off hundreds of Xstrata managers, and begin to sell assets and dispose of projects it deems non-starters.
Glencore (GLCNF.PK) is expected to agree to concessions this week to ease Chinese worries over its grip on the supply of copper, clearing the final regulatory hurdle in its acquisition of miner Xstrata (XSRAF.PK). Industry sources say a solution might involve a sale from among Xsrata's copper projects, such as Las Bambas in Peru, or giving China a guaranteed slice of production.
Glencore (GLNCF.PK) again extends the deadline for closing its mega-merger with Xstrata (XSRAF.PK), saying it needs more time to conclude talks with Chinese antitrust authorities and secure its final regulatory approval. Analysts still expect the deal to close, since Chinese regulators likely would not view the combined company as dominating the copper market. The new deadline is May 2.
Workers at Colombian coal exporter Cerrejon (XSRAF.PK, AAUKY.PK, BHP) sign a collective bargaining agreement effectively ending a month-old strike that hobbled coal production at the one of the world's top producers. Cerrejon produced 34.3M metric tons of coal in 2012, and is investing $1.3B to boost output to 40M tons/year by 2015.
Glencore (GLCNF.PK) and Xstrata (XSRAF.PK) each reported preliminary 2012 financial results (I, II). Like most of their peers, the companies reported lower earnings and big writedowns amid lower prices for most commodities. At Glencore, its commodity trading business helped offset the price weakness, and its adjusted profit which fell 25% Y/Y beat analysts estimates. (earlier)
Glencore (GLCNF.PK) extends the completion deadline for its takeover of Xstrata (XSRAF.PK) to April 16 from March 15 as the companies await approval from China, which is reviewing the proposed merger with a focus on whether the combined company would influence China's copper market. CEO Ivan Glasenberg doesn't see a problem since Glencore "has marketed most of the product of Xstrata into China" prior to the merger announcement.
The labor union representing ~5K workers at Colombia's top coal producer Cerrejon (XSRAF.PK, AAUKY.PK, BHP) says it reached a preliminary agreement that would end a 25-day strike. Cerrejon, which normally produces 100K tons/day of coal, hasn't produced or exported any coal since the strike began Feb. 7.
Xstrata's $5.9B Tampakan mine in the Philippines is granted an environmental compliance certificate by the government, removing one of the hurdles delaying work on Southeast Asia's biggest copper-gold prospect. Tampakan, seen as a bellwether for investment in the country, has been held up by a 2010 ban on open-pit mining imposed by the provincial government of South Cotabato.
Xstrata (XSRAF.PK) reports a mixed 2012 performance in its key copper and coal businesses, boosting coal production 7% to a record 90.4M metric tons on higher output from its Australian thermal coal mines, while copper output fell 16% to 747K tons due to a poor performance at the Chilean Collahuasi mine and as it transitions from old mines to new mines.
A workers strike at the top-producing Cerrejon mine and an environmental incident affecting a rival producer have paralyzed 75% of Colombia's coal exports for five days now. Coal prices remain near one-month highs, and the halt in exports is a serious concern for Colombia's economy. Both Cerrejon's management and the union say they aren't even talking to each other despite government efforts.
Coal prices (KOL) may have touched bottom and break out of a range as workers at Cerrejon, a Colombian coal mine owned by BHP, Xstrata and Anglo American prepare to strike as soon as next week, potentially removing 600K metric tons/week from the market, Barclays says. Also, bad weather may affect shipments from Australia and Indonesia and rail work stoppages may arise in Australia.
The copper unit of diversified miner Xstrata (XSRAF.PK, XSRAY.PK) reveals a definitive capex estimate of $5.2B for the Las Bambas project in Peru, confirming the August's reported estimate. The project is now in full construction phase and is expected to produce 400K tons/year of copper from 2015 for at least the first five years.
South Africa's Competition Tribunal Tuesday conditionally approves Glencore's (GLCNF.PK) $80B merger with Xstrata (XSRAY.PK) but limits the combined group's ability to lay workers off. Last week, the companies reached a deal with unions over any job cuts and with state-owned electricity producer Eskom Holdings about possible coal price increases. Now all the merger needs is approval from China.