[miningmx.com] – GLENCOREXSTRATA said it intended to make an application for a secondary listing on the Johannesburg Stock Exchange adding that Africa was “an important and growing market for the group”.
In comments ahead of an investor day, due to kick off today, the Swiss-based group added that South Africa had “a strong institutional investor base. Its primary listing will remain in London, however.
GlencoreXstrata is capitalised in London at £42.4bn which would make it the third largest company by value on the JSE behind British American Tobacco and SAB, and just in front of BHP Billiton which is capitalised at R636bn.
The listing in Johannesburg was expected to become effective during the fourth quarter of 2013, said Glencore which also unveiled savings from synergies of $2bn following its merger with Xstrata, four times more than the $500m initially expected.
“We have successfully and rapidly completed the integration of Xstrata, identifying at least $2bn of synergies by 2014,” said Glasenberg in a statement.
“A significant portion of the synergies are in overhead costs at head and regional offices. We are only just starting to comprehensively look at the combined mining and
metallurgical operations,” he added.
Of the $2bn in synergy-related savings, the bulk ($1.4bn) would come from direct cost savings while the balance would be made up from $450m in marketing synergies, as already forecast, and $175m from financing synergies.
Glasenburg said there would be an “ongoing comprehensive review of assets” which some believe could see corporate activity with Lonmin, the world’s third largest platinum producer which is listed on the JSE.
GlencoreXstrata recently had two of its executives appointed to the board of Lonmin where they will take up non-executive roles. Lonmin felt the need to publish a statement that it needed to appoint another independent non-executive to its board in order to balance its composition.
Responding to questions following introductory remarks at the investor day, Glasenburg reiterated that Lonmin was not a core asset for the group. “We don’t want to hold an asset where don’t trade the commodity,” he said. “The platinum asset is non-core. It doesn’t have trading ability so it does not give us a big advantage. We will review it as time goes on but we won’t rush it,” he said.
Glasenburg said there would be a reduction in sustaining capital expenditure to $4bn, at the lower end of previous forecasts which guided to capex of up to $5bn, while capital expenditure between 2013 and 2015 would be $3.5bn lower.
Glasenburg hit a positive note in respect of the commodities market which he said would be “exciting” for Glencore.
“There is sound demand for commodities, and we see positive signs of financial discipline across the sector. This provides an environment in which Glencore’s owner-manager philosophy will thrive,” he said.
