Executive Summary
Xstrata Plc (LON:XTA) is a global diversified mining group trading in seven international commodity markets and headquartered in Zug, Switzerland. The group currently operates within 19 countries including South Africa, Australia, Argentina, Canada, Chile, Peru & Columbia. Its key markets are thermal coal, copper, coking coal, nickel, ferrochrome, nickel, zinc and vanadium. They also have a growing presence in platinum group metals with additional exposures to cobalt, gold, silver and lead. Xstrata currently employs approximately 56,000 people worldwide. [1]
Company History
- The company was founded in 1926 in Switzerland as Südelektra AG, and had investments in infrastructure and electricity projects in Latin America. Südelektra renamed itself Xstrata in 1999.
- In 2002 it simultaneously acquired Enex and Duiker coal assets and listed on the London Stock Exchange. Acquisitions of MIM (2004) and Falconbridge (2006) created a global diversified group with strong interests in chrome, coal, copper nickel and zinc.
- Growth and acquisitions since then have brought the company to a market capitalisation of $34 billion recently (July 2009), and turnover of $27,952 (year ended 31 December 2008) although in the recent global economic climate this level of turnover will not be repeated in the short term.
Current Events
- On 21 June 2009 the company announced a proposed merger with Anglo American plc, a company of almost exactly the same size, although Anglo American are proving reluctant, and there are competition issues
- More recently the company is reported to be in talks to acquire Lonmin the South African platinum miner. [2] . (Xstrata already has a 25% stake in Lonmin). Again due to competition issues, Lonmin would have to be divested if Xstrata and Anglo American were to merge.
Business Model
The Group focuses on low cost operations and has a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with a growing platinum group metals business, additional exposures to gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders.
Xstrata’s activities are organised into five global commodity businesses and a technology business, each of which operates with a high level of autonomy. [3]
Products/Services
- Xstrata Alloys is the world’s largest producer of ferrochrome and a leading producer of primary vanadium.
- Xstrata Coal is the world’s largest exporter of…
