Xstrata

Xstrata plc was an Anglo-Swiss multinational mining group headquartered in Zug, Switzerland, with its registered office in London. It developed from a small Swiss infrastructure and electricity-projects business into one of the world's largest diversified mining companies through a combination of corporate restructuring, commodity expansion and large international acquisitions. The business originated in 1926 as Südelektra, a Swiss concern involved in infrastructure and electricity projects in Latin America. During the 1990s, after Marc Rich + Co AG became its majority shareholder, the company moved away from non-core infrastructure activities and established mining as its principal business. The Xstrata identity was created in 1999, and Mick Davis became chief executive in 2001. The company was listed on the London Stock Exchange in 2002 and rapidly expanded its mining portfolio. At the time of its London listing, it acquired coal assets from Glencore in Australia and South Africa. Its 2003 acquisition of MIM Holdings for approximately A$2.9 billion substantially increased its exposure to copper, zinc, lead and coal. Xstrata later acquired Falconbridge, a Canadian producer with nickel, copper, zinc, lead and aluminium interests, after building a 19.9% stake in 2005 and purchasing the remainder in 2006 following a contested takeover process. At its peak, Xstrata operated or held interests in mining projects across Africa, Asia, Australasia, Europe, North America and South America. Its principal commodities included copper, thermal and coking coal, nickel, zinc, ferrochrome and vanadium, with smaller interests in aluminium, gold, lead, silver and platinum-group metals. The group described itself as a major producer of several of these commodities and was particularly significant in export thermal coal, ferrochrome and base metals. It also held a 24.9% interest in Lonmin, giving it exposure to platinum-group metals. China became an important sales market, accounting for as much as one-third of global sales according to the cited reference material, and Xstrata opened its first mainland Chinese office in Shanghai in 2012. The company's growth also brought disputes over mine closures, community relations, environmental effects and the treatment of Indigenous and local interests. The closure of the Windimurra vanadium plant in Western Australia in 2004 caused substantial job losses. Expansion of the McArthur River zinc mine in Australia's Northern Territory led to a legal challenge concerning the diversion of the river and the rights of traditional owners. In Peru, protests associated with alleged water pollution from mining operations in Espinar in 2012 were followed by deaths, a state of emergency and the suspension of constitutional civil liberties. Xstrata's Mangoola coal project in New South Wales also attracted criticism over community consultation and pre-mining conduct. Xstrata maintained a close structural and commercial relationship with Glencore. Glencore controlled a substantial shareholding from the early 2000s, and Glencore executives held board positions at Xstrata. The two groups announced a proposed merger in 2012, but shareholder opposition led them to reconsider a controversial executive retention package. Glencore completed the acquisition of Xstrata on 2 May 2013. The combined company initially used the name Glencore Xstrata plc, but subsequently reverted to Glencore plc and retired the Xstrata brand. The Xstrata name continued in Xstrata Mexico, a special-purpose company established to develop Mexican iron-ore interests, although that entity later halted mining activity and moved into agribusiness.

Xstrata began in 1926 in Switzerland as Südelektra, an infrastructure and electricity-projects concern with activities in Latin America. Its later transformation was closely associated with a change in ownership and strategy. In 1990, Marc Rich + Co AG became the company's majority shareholder. During the following decade, the business reduced its emphasis on infrastructure and other non-core activities and developed mining into its central line of business. The Xstrata name was created in 1999 by the British corporate identity consultancy Lloyd Northover. Mick Davis became chief executive in 2001. At that time Glencore controlled about 40% of Xstrata's stock and remained an important commercial partner, including through marketing arrangements. Xstrata's London Stock Exchange listing in 2002 marked a new phase of expansion. The company acquired coal assets from Glencore in Australia and South Africa, giving it a substantial position in the international coal industry. The 2003 takeover of Australia's MIM Holdings for approximately A$2.9 billion doubled the scale of the company and added significant copper, zinc, lead and coal operations. Xstrata also pursued further Australian growth, although its 2005 bid for WMC Resources failed when BHP succeeded in acquiring that company. In the same year, Xstrata bought 19.9% of Falconbridge Nickel Mines in Canada. After a contested takeover process involving Inco, it acquired the rest of Falconbridge in 2006. The transaction made nickel and other Canadian base-metal assets important parts of the group. Expansion continued across multiple continents. Xstrata operated mines and projects in countries including 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. Its portfolio covered copper, thermal and coking coal, nickel, zinc, ferrochrome and vanadium, together with smaller interests in aluminium, gold, lead, silver and platinum-group metals. The company operated Bulga Coal in New South Wales and managed the mine on behalf of its shareholders. It also expanded the George Fisher zinc-lead mine at Mount Isa after government approval in 2010. The group encountered opposition and controversy alongside its growth. The 2004 closure of the Windimurra vanadium plant in Western Australia caused extensive unemployment. Approval of an expansion of the McArthur River zinc mine in the Northern Territory generated a legal challenge by traditional owners. The proposed mine design involved diverting a 5.5-kilometre section of the river to permit a large open-cut pit. Although the Northern Territory Supreme Court ruled for the Northern Land Council in May 2007, the territory government subsequently enacted retrospective legislation allowing the project to proceed. Xstrata's Mangoola coal project in the Hunter Valley also attracted criticism concerning community relations and alleged misleading conduct during the pre-mining phase. In Peru, protests in Espinar in May 2012 concerned alleged contamination of local water sources by mining operations. The confrontations led to two civilian deaths, the imposition of a state of emergency and restrictions on constitutional civil liberties. The episode became one of the most serious controversies associated with the company's operations. Xstrata's relationship with Glencore ultimately determined its corporate fate. Glencore executives Willy Strothotte and Ivan Glasenberg served on the Xstrata board, with Strothotte as chairman. The companies announced a merger proposal in 2012, but shareholder resistance focused on a proposed retention arrangement for senior executives. The scheduled court meeting was postponed while the terms were reconsidered. Xstrata completed the transaction with Glencore on 2 May 2013. The combined business initially adopted the name Glencore Xstrata plc, but later became Glencore plc. The Xstrata brand was retired, ending Xstrata's existence as an independent international mining brand.

• 2013

  Acquisition by Glencore

  [1]Xstrataen.wikipedia.org

  Glencore acquires Xstrata and later retires the Xstrata name.

• 2012

  Shanghai office opens

  [1]Xstrataen.wikipedia.org

  Xstrata opens its first office in mainland China.

• 2010

  George Fisher expansion approved

  [1]Xstrataen.wikipedia.org

  Queensland authorities approve Xstrata's expansion plan for the George Fisher mine at Mount Isa.

• 2006

  Falconbridge acquisition completed

  [1]Xstrataen.wikipedia.org

  Xstrata purchases the remaining interest in Falconbridge after a contested takeover process.

• 2003

  MIM Holdings acquisition

  [1]Xstrataen.wikipedia.org

  The A$2.9 billion takeover of MIM Holdings greatly enlarges Xstrata's copper, zinc, lead and coal businesses.

• 2002

  London Stock Exchange listing

  [1]Xstrataen.wikipedia.org

  Xstrata lists in London and acquires Glencore's Australian and South African coal assets.

• 2001

  Mick Davis becomes chief executive

  [1]Xstrataen.wikipedia.org

  Davis takes leadership as the company begins its major international expansion phase.

• 1999

  Xstrata name is created

  [1]Xstrataen.wikipedia.org

  The Xstrata corporate identity is developed by Lloyd Northover.

• 1990

  Marc Rich + Co AG becomes majority shareholder

  [1]Xstrataen.wikipedia.org

  A change in ownership precedes the company's move away from non-core infrastructure and toward mining.

• 1926

  Südelektra is established

  [1]Xstrataen.wikipedia.org

  The Swiss infrastructure and electricity-projects concern that later became Xstrata is founded.

A globally diversified, acquisition-led mining group focused on base metals, energy minerals and ferroalloys, with an integrated international operating and marketing presence.

• Base metals

  Copper

  Copper was one of Xstrata's principal businesses, expanded through the acquisition of MIM Holdings and other international mining interests. The group held copper operations and projects across several regions and marketed concentrates and other mined output through its wider commercial relationship with Glencore.

• Energy minerals · 2002

  Coal

  Coal was a major pillar of Xstrata's portfolio. The company produced both thermal and coking coal, operated Australian assets including Bulga Coal, and was described as the world's largest exporter of thermal coal. Its coal operations extended across Australia, South Africa and other markets.

• Base metals

  Zinc and lead

  Xstrata produced zinc and lead through assets acquired and developed in Australia and elsewhere. The McArthur River and George Fisher operations were among the notable assets associated with its zinc and lead business, which also included exposure to associated silver and other mineral streams.

• Base metals · 2006

  Nickel

  Nickel became a substantial part of the group after the Falconbridge acquisition. The Canadian business brought nickel together with copper, aluminium, lead and zinc interests, while Xstrata also maintained nickel exposure through operations and projects in other countries.

• Ferroalloys

  Ferrochrome

  Xstrata was described as the world's largest producer of ferrochrome. The material formed part of its diversified mineral portfolio and supplied the stainless-steel value chain alongside its broader chrome and mining interests.

• Specialty metals

  Vanadium

  Vanadium was a smaller but distinctive product line. Xstrata operated or held interests in vanadium mines and processing assets, including the Windimurra plant in Western Australia, which it closed in 2004.

• 2012

  Espinar water-pollution protests

  Residents in Peru's Espinar province protested alleged pollution of water sources connected to Xstrata mining activities. Police violence resulted in two civilian deaths, after which the government declared a state of emergency and suspended certain constitutional civil liberties.

  Source

• 2007

  McArthur River mine expansion dispute

  Traditional owners and the Northern Land Council challenged approval of an expansion requiring diversion of the McArthur River for an open-cut mine. A court initially ruled against the approval, but retrospective legislation later enabled the expansion to proceed.

  Source

• 2007

  Mangoola community-relations controversy

  Xstrata Coal faced criticism in regional media over its handling of community relations during the pre-mining phase of the Mangoola coal project in New South Wales. Opponents formed the Wybong Action Group.

  Source

Read more

• 2013

  Completion of Glencore acquisitionM&A

  Background

  Xstrata and Glencore had pursued a combination intended to create a larger integrated mining and commodities group.

  Action taken

  Glencore completed the acquisition of Xstrata on 2 May 2013.

  Aftermath

  The combined company later abandoned the Glencore Xstrata name and became Glencore plc, ending Xstrata's standalone corporate identity.

  Source

• 2012

  Proposed merger with GlencoreM&A

  Background

  Glencore had been a major shareholder and commercial partner of Xstrata since the early 2000s.

  Action taken

  The companies proposed combining their businesses, while postponing the court meeting and reconsidering the executive retention arrangements after shareholder opposition.

  Aftermath

  The transaction was completed in 2013. Xstrata's chief executive and team departed, and CFO Trevor Reid moved from employment to a consulting role.

  Proposed executive retention package. More than £170 million for 73 key executives (2012)

  Source

• 2006

  Purchase of FalconbridgeM&A

  Background

  Xstrata had acquired a 19.9% stake in Falconbridge in 2005 amid competition involving Inco.

  Action taken

  Xstrata acquired the remaining 80.1% of Falconbridge and absorbed its diversified Canadian mining portfolio.

  Aftermath

  The transaction strengthened Xstrata's nickel, copper, zinc, lead and aluminium businesses.

  Source

• 2004

  Closure of Windimurra vanadium plantStrategy

  Background

  Xstrata had recently acquired the Windimurra vanadium operation in Western Australia.

  Action taken

  The company closed the plant, removing hundreds of jobs and concentrating its vanadium position in other operations.

  Aftermath

  The closure contributed to higher vanadium prices received by Xstrata's other vanadium mines, while causing significant local unemployment.

  Source

1. 1Xstrataen.wikipedia.org