Zijin Mining reports illegal mining at Buritica gold mine, losses being assessed
Zijin said that organized groups had illegally mined some "high-grade ore bodies" in the shallow areas of the mine.
The Association of British Insurers (ABI), which represents around a fifth of investments on the London Stock Exchange, issued a so-called “red-top alert” on Thursday over mining group Xstrata’s plans to pay $342 million (£217 million) to its senior management to stay after the company’s planned merger with commodities trader Glencore.
The unusual alert, considered the ABI’s most serious warning, indicates a breach in corporate governance according to Financial Times and was sent this morning to over 300 members.
“The ABI is always skeptical about the effectiveness of retention payments,” said Andrew Ninian, ABI head of corporate governance in a statement. “In this case we have raised further concerns around the significant retention awards being offered to Xstrata executives which aren’t linked in any way to performance.”
The ABI said the alert doesn’t constitute a recommendation on how its members should vote on the remuneration package, nor does it constitute an opinion on the merger; the red top alert only “flags concerns” and is strictly focused on the remuneration arrangements.
Xstrata shareholders will vote on July 12 on both the $70 billion merger and the pay arrangements, which need the approval for the deal to continue. At least half of the votes must back the pay plan, with Glencore prevented from voting its 34% stake.
Billed as the “merger of equals” by industry analysts and insiders alike, the proposed deal has been facing stiff opposition from Xstrata shareholders. They accuse Ivan Glasenberg, chief of Glencore, and Xstrata CEO Mick Davis of negotiating “a cosy stitch-up” without consulting them about getting a better offer.
Glasenberg and Davis saw the chances of sealing the deal in early May improve when the oil and natural gas rich nation of Qatar said it had plans to up its stake in Xstrata to over 10%, which would make the country’s sovereign wealth fund the diversified miner’s second largest shareholder.
Xstrata is the world’s biggest exporter of thermal coal, the fourth-largest copper producer and in the decade under Davis has gone from having fewer than 2,500 employees to a workforce exceeding 70,000 in 20 countries.
A combined Xstrata and Glencore would have revenues in excess of $100 billion with as much as 80% of sales earned from mining.
Talk over the acquisition began last year May when Glencore went public in an IPO valued at $10 billion. Based on current share prices, Glencore’s purchase of all Xstrata shares will cost it an estimated $33 billion.
Glencore (LON:GLEN) and Xstrata (LON:XTA) stocks were down this morning. Glencore dropped 2.28% to 325.65 and Xstrata fell 2.15% to 851.40 at 7:14 ET.
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