RPT-Australia to help Glencore/Xstrata stay ahead in zinc

Thu, Apr 12 18:41 PM EDT MILAN, April 12 (Reuters) - Expansion of zinc mining operations in Australia will help mining group Xstrata and commodities trader Glencore to keep zinc market leadership after their planned merger, offsetting output cuts in Canada, a senior Xstrata manager said. A full merger of Glencore and Xstrata, now before shareholders, will make the group the world's biggest zinc producer, with a controlled output of about 1.6 million tonnes and a 16 percent share of global zinc ore production. But in 2013, the Xstrata-owned Brunswick and Perseverance mines in Canada will run dry, removing about half a million tonnes of zinc from the global system. "We are trying to make that up with expansion in ore mines," Emilio Tamargo, general manager for business development and research at Xstrata's zinc unit, told Reuters on the sidelines of a conference organised by Metal Bulletin. "I think total capacity we are working on is about half a million tonnes which more or less will compensate what we are losing," Tamargo said. Xstrata expects to complete expansion of its Mount Isa mining operations and start up Lady Loretta mine in Australia next year, he said. Lady Loretta is expected to have an annual production of 126,000 tonnes, according to Xstrata website. The group is also looking at organic growth in zinc mining in other geographic areas as well as possible acquisitions but has no definite projects on the table at the moment, he said. Xstrata plans to start up the Bracemac-McLeod zinc mine in Canada, with a 90,000 tonne output, next year. =========== UPDATE 3-Xstrata to stop Australia copper smelting by end-2016 Wed, May 18 02:33 AM EDT * Xstrata to dismantle Mt Isa smelter, Townsville refinery * Blames global smelting, refining oversupply * Focus on Australian copper, zinc mine expansions (Adds analyst comment in fourth paragraph) By James Regan SYDNEY, May 18 (Reuters) - Xstrata , the world's fourth-largest copper producer, plans to phase out copper smelting and refining in Australia by the end of 2016 in the face of a worldwide capacity glut, dismantle its plants and shift to sales of concentrates. The shift comes days before Xstrata's 34 percent owner, commodities trader Glencore plans to go public, a move that many see as a precursor to a takeover bid for Xstrata. [ID:nLDE74G1FZ] Glencore specialises in trading vast amounts of bulk commodities, such as coal, sugar and metals concentrates, around the world.

"Xstrata could be looking to clean up the company structure for a more pure mining-type investment rather than having that downstream overhang and dilution," said Mark Pervan, senior commodities strategist for ANZ Bank in Melbourne. "Market conditions have been very challenging for copper smelting and refining operations as a result of over capacity in the global market, low treatment and refining charges and increasing operating and capital costs," he said in a statement. "The economic viability of our Mount Isa copper smelting and refining operations has been under increasing pressure for a number of years and cannot be sustained in the long term." Steve de Kruijff, chief operating officer of Xstrata's Copper North Queensland division, cited poor margins in smelting and refining for the move to phase out smelting and refining in Australia. An Xstrata spokesman told Reuters the smelter in Mt Isa, the company's only smelter in Australia, and its refinery in Townsville, would be dismantled over the next five years rather than sold, with copper ores under the smelter mined at a later date.

In 2010, the smelter produced 213,031 tonnes of copper in anode. It accounts for more than half of Australia's total smelting capacity, with BHP Billiton's Olympic Dam operation a distant second at about 200,000 tonnes a year. But the immediate impact of the closure plan would be mainly psychological, one analyst said. "I don't foresee any immediate impact on the copper markets now since the smelter is slated to close only in five years' time," said Yang Jun, an analyst for China Futures Co. "Moreover, I believe the global copper supply will be in deficit only until 2013. Any impact it has on the immediate demand should merely be psychological," he said. The Swiss-based miner will redirect efforts on expanding its copper and zinc mines in north Queensland state, expanding exports of mineral concentrates rather than cathode. Xstrata's 300,000 tonnes-a-year smelter at Mount Isa, which accounts for roughly half a percent of total world smelting capacity, runs concentrate blended from its Mount Isa and Ernest Henry Mines. The anode is then refined into cathode at its Townsville refinery, which also refines anode produced overseas. The Townsville refinery produced 287,001 tonnes of saleable copper cathode in 2010. Spot market treatment and refining charges have dropped to about $100 a tonne and 10 cents/lb from $120 a tonne and 12 cents a pound in March. The fees are paid by concentrate sellers to smelters, and then are deducted from the final sale price, based on the London Metal Exchange copper price. Global smelting capacity is set to expand 14 percent to 20.68 million tonnes by 2014, according to the International Copper Study Group. Xstrata last year produced 913,500 tonnes of copper in cathodes and concentrates, company data showed. Xstrata said over the next five years it would invest to focus on exporting zinc and copper concentrates from Queensland and expanding rail and port capacity to handle the new production. More than 400 staff will be affected by the shift, but the company said it wants to keep them on in other areas of the business. "We need to evolve our business to ensure we can secure the future of our operations for the long term," de Kruijff said. (Additional reporting by Carrie Ho in Singapore and Sonali Paul in Melbourne; Editing by Ed Davies and Clarence Fernandez) =============== Metals producers bear main brunt of Cyclone Yasi Thu, Feb 03 02:50 AM EST By James Regan SYDNEY (Reuters) - Copper and zinc producers on Thursday were bearing the main brunt of Cyclone Yasi as more operations across northeastern Australia were forced to close even as the storm lost steam. Coal miners, on the other hand, were left little-scathed by the powerful storm that swept across the Coral Sea and smacked into the Australian coast late on Wednesday. Still, meteorologists expect the storm to pack minimal cyclone strength as far inland as the Mt Isa mining region, 900 km from the coast. Xstrata Plc has started evacuating staff from its Mt Isa copper mining and smelting unit as Yasi continues its westward path inland, the company said. Also, Xstrata's Ernest Henry Mine at Cloncurry even further inland has been reduced to a skeleton crew in anticipation of high winds generated by the storm, the company also said. The Mt Isa operations yield around 160,000 tonnes of copper in concentrate and 214,000 tonnes of copper anode a year. The Ernest Henry unit produces 90,000 tonnes of copper in concentrate a year, which is either transported to Mount Isa for smelting or sent to the port at Townsville for export. Three-hundred kilometers north of Mt Isa, production from Century zinc mine was also suspended as Yasi closed in, according to mine owner MMG, a unit of Minmetals of China. The Century mine in 2011 is forecast to yield just over 500,000 tonnes of zinc in concentrate, making it the world's second largest zinc mine behind Teck Resources' Red Dog mine in Alaska. "With the combination of the weather and the availability of supplies, we wouldn't expect to start re-mobilizing the site until Sunday (February 6)," MMG spokesman Bruce Loveday said. INTERRUPTED PRODUCTION "This might amount to a week of interrupted production, though over the course of the year that would just disappear into the mine's normal volatility," Loveday said. The global zinc market was in surplus by 223,000 tonnes in the first 11 months of 2010, according to the International Lead and Zinc Study Group (ILZSG). But zinc futures are still up 15 percent since early December to $2,490 a tonne ($1.13 a pound) on expectations steelmakers will need more metal for galvanizing steel products such as rebar used in construction. The 30,000-tonnes-per-year QNI nickel refinery remained shut after the brunt of the cyclone slammed into the coastline overnight packing winds forecast up to 300 km (186 miles) an hour near its core, a spokesman for the refinery said. "It is not yet safe to conduct an inspection of the site," the spokesman said. The core of the cyclone, with gusts of more than 125 kmph, will weaken as it continues its a west-southwesterly direction over land, according to the Australian Bureau of Meteorology Xstrata also said it will be later on Thursday at the earliest before it can provide an update on its copper division due to weather conditions. Xstrata shut and evacuated its 300,000-tonnes-per-year Townsville copper refinery and port operations on Wednesday, saying it could be several days before operations returned to normal. A one-week outage of the Townsville smelter would result in between 5,000 and 6,000 tonnes of lost production. Copper prices -- already at record highs near $10,000 a tonne -- could rally to $12,000 a tonne and higher as output struggles to keep up with demand. COAL ESCAPES FULL FORCE Coal mines appeared to have been spared the full force of the storm, given most are located well in more southern regions outside the core of the storm. "We've had no reports of any significant rainfall adding to problems for the coal mines," Queensland Resources Council spokesman Jim Devine said. "It's really a case of just getting the employees back to work now." Rio Tinto expects to reopen its Hail Creek colliery on Friday after feeling only minimal impact from Yasi, according to the company. Also, Xstrata said its Newlands coal mine has been reopened after shutting down Wednesday night and preparations were underway to restart its Collinsville coal mine where the cyclone knocked out power. "It seems to have caused little direct damage," said Patersons Securities analyst Andrew Harrington. Australia's largest coal freight company, QR National, will shortly resume services on two rail networks that were temporarily suspended in preparation for Cylone Yasi, the company said. Queensland accounts for about a fifth of Australia's economy and 90 percent of its steelmaking coal exports. A spokesman for Australia's largest coking coal export terminal Dalrymple Bay, said operations could reopen mid-day local time (0200 GMT). The coal terminal was still conducting inspections of its equipment on Thursday morning, but general operations manager Greg Smith said it appeared that the terminal was not damaged by the cyclone winds and rain. Macarthur Coal said that its Coppabella and Moorvale mines were resuming normal operations after scaling back staffing due to Cyclone Yasi. The mine sites were undamaged by the storm but the company will continue to monitor rainfall in the area, it said. Dozens of dry bulk carriers have abandoned plans to pick-up coal cargoes in Australia due to the cyclone and have rerouted to the Atlantic in hopes of new business, shipbrokers said on Thursday. (Additional reporting by Rebekah Kebede in PERTH and Randy Fabi in SINGAPORE; Editing by Manash Goswami) ============= THE SYDNEY MORNING HERALD (www.smh.com.au) Alan Joyce, the chief executive of Qantas Airways , yesterday said the airline's international operations were "significantly short of where we should be." Mr Joyce said competitors from the Middle East and China were flooding the market with capacity, adding that "if we continue on our current path, there will be a real question over the viability of Qantas International." Page B1. -- Indonesia's Garuda Airlines yesterday announced it would increase capacity between Australia and Indonesia over the coming six months, with chief executive Emirsyah Satar saying the airline may open a new route to the Gold Coast. Mr Satar said he believed there was room for growth in the full-service sector between the two countries, which is increasingly dominated by budget airlines. Page B2. -- The Queensland Resources Council yesterday said the state's mining industry had not suffered any significant damage from Cyclone Yasi, although economists say the suspension of operations and port closures due to the storm has cost around A$300 million in lost exports. Mines operating in the state's east were resuming operations yesterday, while mines around Mount Isa in the west were preparing for the impact of the weakened cyclone. Page B5. -- Resources group BHP Billiton is pushing ahead with its proposed US$12 billion Jansen potash project in Canada's Saskatchewan province, yesterday announcing it would conduct a feasibility study. BHP's Graham Kerr, president of diamonds and specialty products, said Jansen could become "one of the world's premier potash mines and the platform for a significant and scalable potash business." Page B5. -- ======= Australia cyclone shuts copper refinery, coal mines Wed, Feb 02 07:45 AM EST SYDNEY (Reuters) - Australia's huge Cyclone Yasi forced a copper refinery and coal mines to shut and paralyzed sugar and coal exports as it began pounding the northeast coast on Wednesday, threatening to further inflate world sugar, copper and coal prices. The edge of the cyclone, one of the most powerful recorded, came ashore in north Queensland state, heading directly for sugarcane fields and threatening a 300,000-tonnes-a-year copper refinery in the coastal city of Townsville. "We've shut everything down and that situation is likely to carry on for several days until a clearer picture emerges," said Josh Euler, a spokesman for the refinery owner, Xstrata. Global miners BHP Billiton and Peabody Energy have also shut several coal mines located in coal-rich Queensland ahead of the cyclone, whose center is due to hit land early on Thursday. BHP's Peak Downs, South Walker Creek and Broadmeadow coal mines were all shut, which have a combined capacity of over 15 million tonnes of coal per year of coking coal. Peabody closed its Burton mine, which produces 2.7 million tonnes of coal per year Earlier this week, a 30,000 tonnes-a-year nickel refinery at Yabulu shut down ahead of the cyclone, and the major coal export terminals of Dalrymple Bay and Gladstone stopped loading ships.. Shipping in and out of the region has come to a standstill, with ports along hundreds of kilometers of coastline closed and bulk carriers retreating from the cyclone zone to safe anchorages. Copper prices climbed to a record high of nearly $10,000 a tonne on Wednesday, fueled by tight supplies and optimism over growing demand. Any further disruptions to supply would only add pressure to the price. AUSTRALIA SUGAR CROP AT RISK The sugar crop is likely to be the biggest casualty from the cyclone, with Queensland accounting for almost all raw sugar shipments from Australia, the world's third-largest exporter. "Certainly what happens in Australia will affect prices in the global market," a sugar dealer in Bangkok said. The center of Cyclone Yasi, one of the world's most powerful storms, is headed straight for coastal regions that account for around a third of the country's sugarcane production. It has already forced several sugar mills to suspend operations. World raw sugar prices are hovering near 30-year highs because of doubts about Indian exports and the size of the crop in Brazil, the world's top sugar producer. In New York on Tuesday the March raw sugar contract inched down to finish at 33.96 cents per pound, although traders said fundamentals remained bullish. The country's main sugar cane growers organization, Queensland's Canegrowers, estimated on Wednesday that industry losses could exceed A$500 million ($505 million), including possible cyclone damage to infrastructure. Last year's sugarcane harvest, ended in December, fell to 27.3 million tonnes of cane because of recent heavy rains. Typically, production totals 32 million to 35 million tonnes. About five million tonnes was left uncut because of rain disruption and is most at risk being smashed by the cyclone because it is standing taller than the new 2011 crop. COAL MINES, GRAZIERS ON ALERT Yasi, one of the world's most powerful cyclones, is so large that it is expected to travel as far inland as the Mt Isa mining region, about 1,000 km inland, before finally breaking up. Xstrata said it was bracing for high winds at its Mount Isa Copper mining and smelting unit and also at its Ernest Henry copper mining operations even further inland. Most of Queensland's coal mines lie south of the cyclone's predicted march west across the state, but the northerly mines, such as Rio Tinto's Hail Creek mine and Xstrata Coal's Collinsville mine, have been closed. Xstrata was considering shutting its Newlands mine as well. The Pajingo gold mine, south of the historic gold mining town of Charters Towers and yielding around 2,200 ounces a month, is well within the forecast path of Yasi, and the owner said on Wednesday that work had been suspended. Queensland state's large livestock industry also prepared on Wednesday for heavy loses from Cyclone Yasi. Australia's National Farmers Federation estimates that the cyclone could affect a fifth of Queensland's A$3.3 billion ($3.34 billion) herd if it barrels through prime grazing areas. Queensland, with about 12 million head of cattle, accounts for about 44 percent of the national herd. Australia's banana growers also face major losses, with the crop now in full swing. In 2006, local banana prices quadrupled after Cyclone Larry destroyed 80 percent of the national crop. "Losses will likely be catastrophic again," the National Farmers Federation said in an email to Reuters. ($1 = 0.988 Australian Dollars) =========== TEXT-Oceana Gold appoints Mick Wilkes CEO Mon, Nov 15 16:46 PM EST (The following statement was released by the company) WELLINGTON, Nov 16 - The Board of Directors of OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) ("the Company") are pleased to announce the appointment of Mr. Mick Wilkes as Chief Executive Officer, commencing in mid-January, 2011. In the intervening period, he will finish up his role as Executive General Manager of Operations at OZ Minerals. Mick Wilkes is a mining engineer with 26 years of broad international experience, predominantly in precious and base metals across Asia and Australia. Most recently, he had responsibility for the evaluation studies and construction of the Prominent Hill copper gold project ($1.2B) in South Australia, which is one of the more significant recent resource developments (100,000 tpa copper and 200,000 ozpa gold) in Australia. Previously he was General Manager of the Sepon gold copper project for Oxiana in Laos where he was responsible for operations, leading the site team that built and commissioned the first international standard mining operation in the country. His earlier experience was in Papua New Guinea in various senior roles and, at the outset of his career, at Mount Isa Mines in operations and design. Mr. Wilkes (BE, MBA) is a member of the AusIMM and currently a Board member of Aboriginal Enterprises in Mining, Exploration and Energy, and the South Australia Chamber of Minerals and Energy. Jim Askew, Executive Chairman commented "Mick joins OceanaGold as we engage in our next phase of growth in the Philippines, underpinned by our solid production platform in New Zealand. He brings a record of recent successes at Prominent Hill and Sepon, together with broad operations experience in both Australia and across Asia. The benchmarks he has set with local communities in Asian environments are also welcomed. Together with other recent additions to the senior executive team at OceanaGold, the Company has strong leadership fully equipped to consolidate us as an intermediate sized, low cost gold producer." ============ Children living in one of Australia's most lucrative mining centres, Mount Isa, are suffering from brain damage and retardation caused by their excessive exposure to lead, according to Theodore Lidsky. Mr Lidsky, who is a professor of neuroscience at City University of New York, focussed his study on two children aged 4 and 5. Both children had brain damage caused by lead poisoning, Mr Lidsky said, while one of the children recorded a blood lead level three times higher than the safety limit set by the World Health Organisation. Page 1. =========== (Additional reporting by Rebekah Kebede in PERTH and Lewa Pardomuan in SINGAPORE; Editing by Mark Bendeich, Yoko Nishikawa and Sanjeev Miglani) ============== Top News Qatar backing puts Glencore's Xstrata takeover on track Thu, Nov 15 06:16 AM EST By Sarah Young LONDON (Reuters) - Commodity trader Glencore's $32 billion takeover of miner Xstrata looked set to go ahead after Qatar Holdings - the bid target's second-largest shareholder - backed the deal. Qatar, an unexpected kingmaker in Glencore's bid for Xstrata, said on Thursday that it would vote in favor of two key resolutions on the takeover aimed at creating a mining and trading powerhouse. In a snub to Xstrata management, Qatar said that it will abstain from voting on a multimillion-pound management retention plan, which increases the chances of that aspect of the deal being voted down. "In a nutshell, this means the deal is all but done," Liberum analysts said. Qatar's support for the deal, first announced in February, comes after its surprise opposition to terms in June and brings Glencore within weeks of sealing its long-running pursuit of the Swiss mining company. Under a complex structure of votes, Xstrata investors will be able to express their views on the management retention plan without endangering the merger. Xstrata has argued that the retention plan is necessary to the success of the merger because it will ensure that key managers stay on to oversee the shift into a phase of significant volume growth at the company's mining projects. "If the management incentive arrangements do not get passed, it raises some question marks about the success of the deal," Macquarie analyst Jeff Largey said. Several Xstrata shareholders, including Standard Life Investments and Fidelity, have criticized the pay plan, arguing that it is unnecessarily greedy. Qatar was reluctant to become involved in the debate over management pay, which has been raging in Britain since the so-called shareholder spring. Though Qatar has taken an active role in its investments, it was also reluctant to be branded an as an activist investor. Qatar's abstention on the retention plan, which offers more than 70 top executives a total of roughly 140 million pounds ($222 million), will be an embarrassment for Xstrata, which until last month insisted that the takeover be tied to the pay deal. Macquarie analyst Largey said that Xstrata's image would not be enhanced by its attempt to be "a little too cute" with its stance on the retention scheme and vote. INVESTOR PRESSURE The position of Xstrata Chairman John Bond, set to retain the role at the enlarged group, will look difficult if there is a vote against the retention scheme. Such an outcome could strengthen the view of some shareholders that, having been behind a retention plan that risked sinking the deal, he should not remain at the helm of the merged entity. The vote, scheduled for November 20, two days before the European Union is due to give is verdict on the tie-up, comes after Glencore bowed to investor pressure with a raised bid in September. Glencore increased its offer to 3.05 new shares for every Xstrata share, from an earlier bid of 2.8 per share. Shares in Xstrata rose 1.5 percent to 962p by 1047 GMT on Thursday, moving closer to Glencore's offer, indicating that the market expects the deal to go ahead. The tiny, gas rich Gulf state of Qatar has built up a stake of more than 12 percent in Xstrata - a key position in a deal structure that allows only 16.5 percent of Xstrata shareholders to block any bid. ($1 = 0.6310 British pounds) (Additional reporting by Clara Ferreira Marques; Editing by Rhys Jones and David Goodman) =============== Author thelone hydrangea View Profile Add to favourites Ignore Date posted 2012-08-29 20:52 Glencore's Glasenberg Xstrata gambit is dead in the water Glasenberg didn't see Qatar coming and he assumed almost everybody would recognise the supposed inevitability of the two companies combining The mystery in the great Glencore-Xstrata saga is why Ivan Glasenberg allowed himself to be bounced into structuring the deal as a scheme of arrangement, thereby setting a threshold for victory of 75% approval from non-Glencore shareholders. Such a high hurdle opened the door for a deep-pocketed sovereign wealth fund - Qatar Holding - to gobble almost 12% of Xstrata and thereby achieve a blocking stake. Over-confidence must be part of the explanation. Glasenberg didn't see Qatar coming (to be fair, nor did anybody else). He thought he would be dealing with the usual pusillanimous collection of fund managers who roll over in the end when even a modest takeover premium is on the table. And he assumed almost everybody would recognise the supposed inevitability of the two companies combining. After all, Glencore owns 35% of Xstrata and the combination had been talked about for years as the only logical resolution of the ownership tension. Glasenberg must now confront the consequences of his embarrassing miscalculation. The current proposed deal - 2.8 Glencore shares for every Xstrata share - is clearly dead in the water. The Qataris won't bite at that price and nor, for good measure, will Norges Bank, Standard Life, Schroders and Knight Vinke among other Xstrata shareholders. Glasenberg hasn't yet declared the 2.8 ratio to be final so there remains the possibility he will unveil an eleventh-hour sweetener before the vote a week on Friday . But it's not the way to bet. The Qataris want 3.25 and it's hard to imagine Glasenberg going close to that level given that Xstrata's shares now trade at just 2.5 times. The loss of face would be immense. Instead, Glasenberg's strategy seems to be play down the need to gain approval next week ("If it does not happen – no big deal," he said last week) and talk up the chances of returning another day. The trouble is, a re-run is easier to imagine in theory than in practice. The Qataris' investment in Xstrata has been imperfectly timed (they've bought a big stake just as the commodity cycle is turning downwards) but one must assume they are prepared for a long haul. They, like other refuseniks among Xstrata shareholders, may be dreaming of the day when their company spits out $6bn (£3.8bn) a year in cash after its heavy investment over the past few years. If that's the gamble, there's no point giving up on the dream after a year or two of weak commodity prices. Mining is a long-term business. If the Qataris think a 3.25 ratio is the minimum requirement today, they will probably stick to that line for a long time yet. They may also insist that Xstrata replace Sir John Bond with a new chairman who shares their view on valuation. Of course, Glencore's acquisition currency - its shares - could also outperform Xstrata's in future, which would oil the arithmetic of a new all-share offer. But, given that the Xstrata shareholding contributes almost 40% of Glencore's profits, massive divergence is hard to achieve. Glencore's unique trading arm would have to fulfil all the hype about its counter-cyclical resilience. That could happen (and last week's numbers were useful early evidence) but it will take at least a couple of years for doubters on the Xstrata register to abandon their view that profits from trading commodities just aren't of the same quality as profits from digging stuff out of the ground. Mega-deals that fall apart at the first attempt do sometimes return. Glaxo Wellcome and SmithKlineBeecham did the deed two years after their first fumble in 1998. And one can't ignore the fact that Glencore will continue to own 35% of Xstrata, which is a mighty strong starting position. But even two years is a long time in the feast-to-famine mining game. One suspects that Glasenberg's best chance of bagging his prey may be about to come and go. Simon Neville,The Guardian. ================= (RNS) 2012-11-20 15:47 Xstrata PLC - Shareholders approve all-share merger RNS Number : 6127R Xstrata PLC 20 November 2012  NEWS RELEASE Shareholders approve all-share merger with Glencore International plc Zug, 20 November 2012 At shareholder meetings held today in Zug, Switzerland, Xstrata's shareholders other than the Glencore Group approved the proposed all-share merger of Xstrata plc and Glencore International plc, subject to the resolution to approve the Revised Management Incentive Arrangements to be put to the Further Xstrata General Meeting not being passed. This resolution was subsequently not passed. Consequently, the merger will proceed, subject to outstanding regulatory approvals and UK Court approval, but the Revised Management Incentive Arrangements will not be put in place to retain key Xstrata operational and functional management. Sir John Bond, Xstrata plc Chairman, commented: "We welcome shareholders' support for the merger with Glencore today, which underlines the sound strategic rationale for a combination of the two companies. It is our judgement that retention arrangements served the interests of shareholders by mitigating the risk of losing the management team that built Xstrata and who would be fundamental to the group's future success. Xstrata's board put in place a scheme of arrangement and voting structure that empowered non-Glencore shareholders to determine how and whether the merger would proceed and today, our shareholders have voted to approve the Merger without supporting the retention arrangements. "The immediate focus of Xstrata's board and management team is on the successful completion of the Merger and we remain committed to delivering the outcome that shareholders have approved today. I have said consistently that I would do what is in the best interests of the company. In the light of shareholders' decision not to support the board's recommendation, I have informed the Xstrata plc board and Glencore's current chairman that, once the Merger has completed, I intend to instruct the board to commence an orderly process to appoint a new independent Chairman of Glencore Xstrata plc. Upon the satisfactory conclusion of the search process, overseen by the Glencore Xstrata plc board nominations committee, I will step down." Mick Davis, Xstrata plc Chief Executive Officer, said: "I have been privileged to lead a team of exceptionally talented and capable managers over the past ten years. Together we have created one of the world's leading mining groups from inauspicious beginnings and delivered enormous value to all of our shareholders, including Glencore. The corporate culture, values and world-class portfolio of assets and growth projects we have developed over that time are a source of pride and will make a significant contribution to the combined company. "Glencore Xstrata has the potential to become a very significant company in the resources world and Xstrata's people will be a critical element of this success. I regret the decision of shareholders not to approve these retention arrangements for the members of my senior and operational management deemed crucial to the success of the combined group as, in my view, this introduces unnecessary risks to the merged company's future value proposition. "Shareholders, however, have spoken clearly and we respect their views. I would like to thank my senior team for the professionalism they have shown over the past ten years in running our operations and delivering our major growth projects as efficiently and safely as possible." Merger control approvals have been obtained from the majority of relevant antitrust and regulatory authorities. Only three approvals remain outstanding - those of the EU, China and South Africa. The European Commission Phase I review process will terminate on 22 November 2012. As previously indicated, at the end of the Phase I period, the European Commission may (a) approve the Merger unconditionally, (b) approve the Merger subject to commitments in relation to the Combined Group offered by Glencore and accepted by the European Commission, or (c) conclude that it has serious doubts as to the Merger's compatibility with the common market and therefore refer the case to an in-depth Phase II review. The Merger will lapse if Glencore invokes the relevant condition as a result of either the merger or any matter arising from it being referred by the European Commission to a Phase II investigation, or as a result of the Merger being approved by the European Commission on terms (including as to remedies) which are not reasonably satisfactory to Glencore. End Unless the context otherwise requires, terms defined in Xstrata's circular to shareholders relating to the New Scheme and dated 25 October 2012 shall have the same meanings in this announcement. Neither the content of the company's website nor the content of any other website accessible from hyperlinks on the company's website is incorporated into, or forms part of, this announcement Xstrata contacts: Claire Divver Alison Flynn Telephone +44 20 7968 2871 Telephone +44 20 7968 2838 Mobile +44 7785 964340 Mobile +44 7769 314374 Email cdivver@xstrata.com Email aflynn@xstrata.com Aura Financial StockWell Communications Michael Oke Andy Mills Stephen Breslin +44 20 7321 0000 Philip Gawith +44 20 3370 0013 Notes to editors About Xstrata plc We are a major producer of a range of vital commodities used in everything from constructing buildings and delivering electricity, to developing jet engines and mobile phones. We are one of the top five global producers of copper, thermal and metallurgical coal, ferrochrome, zinc and nickel and we also produce silver, lead, platinum, gold, cobalt and vanadium. Founded in 2002 and headquartered in Switzerland, we operate in over 20 countries and employ over 70,000 people at more than 100 operations and projects around the world. We work in a responsible and sustainable way, with an entrepreneurial spirit and dynamic approach. For more information, visit www.xstrata.com. Further information Defined terms used in this announcement, unless defined herein, have the same meanings as in the new scheme circular published by Xstrata plc on 25 October 2012. This announcement is for information purposes only. It is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Merger or otherwise nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. The Merger is being made solely by means of the Scheme Circular, the Supplementary Scheme Circular and the New Scheme Circular, which, together with the Further Forms of Proxy (and any further supplementary Scheme Circular and any additional form or proxy), contains the full terms and conditions of the Merger including details of how to vote in respect of the Merger. Xstrata urges Xstrata Shareholders to read the Scheme Circular, the Supplementary Scheme Circular, the New Scheme Circular and any further supplementary Scheme Circular in full because they contain/will contain important information in relation to the Merger. Any vote in respect of the Scheme or other response in relation to the Merger should be made only on the basis of the information contained in the Scheme Circular, the Supplementary Scheme Circular, the New Scheme Circular and any further supplementary Scheme Circular. This announcement does not constitute a prospectus or prospectus equivalent document. Notice to US holders of Xstrata Shares The Merger involves an exchange of the securities of a UK company for the securities of a Jersey company and is subject to Jersey and UK disclosure requirements, which are different from those of the United States. The financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. The Merger is proposed to be made by means of a scheme of arrangement under the Companies Act and otherwise in accordance with the requirements of the Code. The scheme of arrangement will relate to the shares of a UK company that is a 'foreign private issuer' as defined under Rule 3b-4 under the US Exchange Act. Accordingly, the proposed combination is subject to disclosure and other procedural requirements applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy and tender offer rules under the US Exchange Act. Any securities to be issued under the Merger have not been and will not be registered under the US Securities Act, or under the securities laws of any state, district or of any other jurisdiction of the United States, or of any jurisdiction other than the United Kingdom. Accordingly, the New Glencore Shares may not be offered, sold, reoffered, resold, pledged, delivered or otherwise transferred, in or into any jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction. It is expected that the New Glencore Shares will be issued in reliance upon the exemption from such registration provided by Section 3(a)(10) of the US Securities Act. Under applicable US securities laws, persons (whether or not US persons) who are or will be ''affiliates'' (within the meaning of the US Securities Act) of Xstrata or Glencore prior to, or of Glencore after, the Effective Date will be subject to certain transfer restrictions relating to the Glencore Shares received in connection with the Scheme. It may be difficult for US holders of Xstrata Shares to enforce their rights and any claim arising out of the US federal securities laws, since each of Glencore and Xstrata are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Xstrata Shares may not be able to sue a non-US company or its officers or directors in a non- US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment. If Glencore exercises its right, subject to the consent of the Panel (where necessary) and with Xstrata's prior written consent, to implement the Merger by way of a Merger Offer, the Merger will be made in compliance with applicable US laws and regulations, including applicable provisions of the tender offer rules under the US Exchange Act, to the extent applicable. Overseas jurisdictions The ability of Xstrata Shareholders who are not resident in the United Kingdom to participate in the Scheme may be affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. New Glencore Shares have neither been marketed to, nor are available for purchase or exchange, in whole or in part, by, the public in the United Kingdom or elsewhere in connection with the Merger. This announcement is not a prospectus and does not constitute an invitation or offer to sell or the solicitation of an invitation or offer to buy any security. None of the securities referred to in this announcement shall be sold, issued, subscribed for, purchased, exchanged or transferred in any jurisdiction in contravention of applicable law. The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Merger disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purposes of complying with English law, the Listing Rules, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England. Forward-looking statements This announcement contains statements which are, or may be deemed to be,"forward-looking statements" which are prospective in nature. All statements other than statements of historical fact are forward-looking statements. They are based on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words suchas "plans", "expects", "is expected", "is subject to","budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects" or words or terms ofsimilar substance or the negative thereof, are forward-looking statements, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could","should", "would","might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Glencore's or Xstrata's operations and potential synergies resulting from the Merger; and (iii) the effects of global economic conditions on Glencore's or Xstrata's business. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors may cause the actual results, performance or achievements of Glencore or Xstrata to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results, performance or achievements of Glencore or Xstrata to differ materially from the expectations of Glencore or Xstrata, as applicable, include, among other things, general business and economic conditions globally, commodity price volatility, industry trends, competition, changes in government and other regulation, including in relation to the environment, health and safety and taxation, labour relations and work stoppages, changes in political and economic stability, disruptions in business operations due to reorganisation activities (whether or not Glencore combines with Xstrata), interest rate and currency fluctuations, the failure to satisfy any conditions for the Merger on a timely basis or at all, the failure to satisfy the conditions of the Merger when implemented (including approvals or clearances from regulatory and other agencies and bodies) on a timely basis or at all, the failure of Glencore to combine with Xstrata on a timely basis or at all, the inability of the Combined Group to realise successfully any anticipated synergy benefits when the Merger is implemented, the inability of the Combined Group to integrate successfully Glencore's and Xstrata's operations and programmes when the Merger is implemented, the Combined Group incurring and/or experiencing unanticipated costs and/or delays or difficulties relating to the Merger when the Merger is implemented. Such forward-looking statements should therefore be construed in light of such factors. Neither Xstratanor Glencore, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward- looking statements, which speak only as of the date hereof. Other than in accordance with its legal or regulatory obligations (including under the Listing Rules and the Disclosure and Transparency Rules of the FSA), neither Xstrata nor Glencore is under any obligation and Xstrata and Glencore each expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No profit forecasts No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that earnings per Glencore or Xstrata ordinary share for the current or future financial years would necessarily match or exceed the historical published earnings per Glencore or Xstrata ordinary share. Responsibility statement The Independent Xstrata Directors each accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Independent Xstrata Directors (who have taken all reasonable care to ensure that such is the case), the information contained inthis announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. This information is provided by RNS The company news service from the London Stock Exchange END MSCPGGCCGUPPGAU Qatar Said to Support Glencore Bid,Xstrata Bonuses Qatar Holding LLC, Xstrata’s second- largest shareholder, is poised to approve Glencore International Plc (GLEN)’s $31.3 billion bid for the company and bonuses for about 70 managers, according to three people with knowledge of the plan. The sovereign wealth fund is primarily concerned with ensuring the merger is completed, and isn’t opposed to the payments that have drawn criticism from institutional investors including Standard Life Investments and Knight Vinke Asset Management LLC, the people said, asking not to be identified discussing a private matter. Fidelity Worldwide Investment, owner of about 0.6 percent of Xstrata, also supports the takeover, a fourth person said. Shareholders are due to vote Nov. 20 on plans to create the world’s fourth-largest mining company. A positive vote from Qatar on the deal and payments would raise the prospects of the year’s biggest takeover completing. Xstrata investors will be asked to consider two resolutions, one to approve the takeover along with 144 million pounds ($228 million) of retention bonuses for about 70 Xstrata employees, and a second that excludes the pay question. Glencore raised its bid on Sept. 7 to 3.05 of its shares for each one in Xstrata from 2.8 shares proposed in February, after Xstrata investors including 12 percent-holder Qatar demanded a higher offer. Xstrata on Oct. 1 recommended shareholders back the revised deal and vote for the bonuses to retain managers responsible for mining assets that will account for about 80 percent of the combined company’s earnings. Qatar Votes Qatar Holding, the investment arm of the Qatar Investment Authority, will probably vote to maximize the number of routes to completing a deal, the people said. Nobody at Qatar Investment Authority in Doha was available to comment when Bloomberg News called outside normal business hours. As well as the two resolutions to be put to a vote, holders of Zug, Switzerland-based Xstrata will also be asked to consider the retention package as a stand-alone proposal. That vote, to be held in a separate meeting about 15 minutes later, requires 50 percent support. The outcome will determine which of the first two resolutions will be acted on. A “yes” vote would validate the result of the first resolution -- the approval of the deal together with the proposed bonuses -- while a “no” vote would mean the deal’s success rests on the resolution that excludes the pay question. Qatar Prime Minister Sheikh Hamad bin Jassim Al Thani, who chairs Qatar Holding, said on Oct. 15 that the Persian Gulf kingdom looked favorably on Glencore’s sweetened bid. “We’re looking in favor of doing something between the two companies,” he said in Doha. Takeover Rules As few as 16.48 percent of shareholders can block the transaction because U.K. takeover rules prevent Baar, Switzerland-based Glencore from voting its 34 percent stake in Xstrata, the world’s largest thermal-coal exporter. The first two proposals to support the combination with or without bonus payments must be backed by a vote of 75 percent. While Standard Life, which holds about 1.4 percent of Xstrata, plans to vote for the deal and against the retention payments, Scottish Widows Investment Partnership, owner of about 1.1 percent, said on Nov. 9 it supports the combination and the bonuses. Shareholder advisory groups are also divided. Pensions & Investment Research Consultants Ltd. recommended opposing the deal, citing a lack of due diligence and board independence at Xstrata. Institutional Shareholder Services Inc. and Glass Lewis urged investors to support the takeover, while calling for the retention bonuses to be voted down. To contact the reporters on this story: Matthew Campbell in London at mcampbell39@bloomberg.net; Firat Kayakiran in London at fkayakiran@bloomberg.net; Jesse Riseborough in London at jriseborough@bloomberg.net http://www.bloomberg.com/news/2012-11-14/qatar-said-to-supp ===================