Xstrata’s new chairman announced

Xstrata has appointed a new chairman, increasing speculation the mining giant is looking to merge with commodities company Glencore.

The Swiss-based mining and metals group has been busy expanding on its interests in Australia , with a number of coal, zinc and copper operations throughout Queensland and New South Wales.

Former Vodafone boss, Sir John Bond will take on the new role.

He is taking over from Xstrata’s long-standing chairman Willy Strothotte, who has held the position since 1994, and will retire at the companies annual general meeting in May.

Increasing speculation of a merger is the fact that Stothotte is also the chairman at Glencore, which is preparing for its initial public listing.

By Strothotte stepping down, he will be eliminating the conflict of interest concerns over him being the head of both companies.

On Tuesday London’s Financial Times quoted a Xstrata spokesperson that the board realized it was appropriate to appoint an independent chairman, in light of Glenmore’s potential listing.

Xstrata is listed on the Swiss and London stock exchanges and the Times quoted its chief executive Mick Davis saying it was “unsustainable in the longer term” to have both companies listed.

The newspaper said industry analysts predict Glencore may merge with London-based Xstrata, which it owns a 34 per cent stake in.

Industry analyst Andrew Keen with HSBC said: "I am not entirely clear whether this appointment indicates that Xstrata wants a truly independent chairman or whether it is a transitional measure before some kind of deal with Glencore down the road".

London’s Daily Telegraph has raised questions about why shareholders weren’t consulted on the board change.

"Sir John is obviously a respected veteran but his recent spell at Vodafone doesn’t quite give us the confidence we were hoping for," an investor told the Telegraph.

"We were pretty underwhelmed by this announcement … It seems very peculiar that they didn’t bother to discuss the appointment with us,” said another.

Xstrata deputy chairman David Rough said in a statement that Bond had an "exceptional record of shareholder value creation" and that the appointment would contribute to the ongoing success of the global group.

Image: Power Magazine

 

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