[miningmx.com] – PERHAPS with a view to kicking on with his own
business plans, Mick Davis has opted out as interim CEO of the combined Glencore-
Xstrata, and will be replaced by Glencore CEO, Ivan Glasenberg.
Glasenberg will assume CEO of the combined company on the merger’s effective date.
Davis will now serve as a consultant to the company until end-June.
News of the executive reshuffle was delivered less than an hour after Glencore
announced that the last regulatory hurdle standing in the way of the $35bn merger
with Xstrata – the approval by China’s Ministry of Commerce – had been received,
albeit with conditions. The effective date of the merger is expected to be May 2.
This will the day when Davis bids adieu to Xstrata as a full-time employee, a step in
which he is joined by other Xstrata executives including his CFO, Trevor Reid, and the
heads of Xstrata’s copper, nickel and ferroalloys divisions.
Other executive departures on the effective date include Xstrata’s executive GM,
strategy and corporate affairs Thras Moraitis, and chief legal counsel Benny Levene.
Along with Trevor Reid, they have agreed to act as consultants to the combined group
for a period of up to six months following the effective date in order to support the
integration of their respective functions, Xstrata said.
Citing unnamed sources, Bloomberg News said on March 11 that Davis was planning
to establish a mining fund that would be interested in buying assets deemed non-core
by the major diversified mining groups.
Reid was expected to join Davis in the venture, said Bloomberg News which added
that Davis and Reid would seek investors for the fund from the Middle East and from
other emerging markets.
In respect of the Glencore-Xstrata merger, all that is required is the adoption of the
scheme of arrangement by Xstrata.
“I look back on the past eleven years at Xstrata with enormous satisfaction,’ said
Mick Davis in an announcement.
And in a slightly melancholic note, especially ahead of the transformative merger with
Glencore, Davis said that his team had been able to create “. a unique culture that
empowered individuals to perform and identify opportunities to create value, while
making a positive and lasting contribution to the communities and countries in which
we work’.
Davis added, however, that he and his team were “pleased to hand over to the new
Glencore Xstrata a company with a strong legacy for value creation and growth, a
high quality portfolio of operations and growth options, supported by a very healthy
balance sheet’.
CARPE DIEM
Had he taken on the interim post as CEO of Glencore Xstrata, it would mean Davis
would have been handcuffed to a desk, in which there was no future, for most of 2013
– a year that could yet see a spate of non-core asset sales as the major mining
houses adjusted to new economic conditions, including a slower rate of growth of the
Chinese economy.
It is thought that Rio Tinto is giving thought to selling its Australian coking coal assets
while a report by Deutsche Bank, cited by the Wall Street Journal in March, observed
that Rio Tinto and BHP Billiton could sell off assets ranging from diamond mines in
Canada to oil fields in Pakistan for a combined $35bn.
Even China’s Ministry of Commerce said it would only approve the creation of
Glencore Xstrata provided the new company sold off assets in its Las Bambas copper
mine in Peru within three months – a condition which Glencore accepted.
Glencore said it would begin the sale process for Las Bambas, an Xstrata greenfield
mine which is set to start operating in 2015, producing more than 400,000 tonnes of
copper a year for at least the first five years.
