Eskom reaches agreement with Glencore, reports claim

The proposed merger of London-listed mining company Xstrata and Glencore appeared to move a step for forward on Friday morning after it was reported that South African power utility provider Eksom had withdrawn its intervention from the Competition Tribunal.

According to an article published on miningweekly.com, Eksom reached a confidential agreement with Glencore and Xstrata relating to a negotiation process to determine Eksom's future relationship with the merged entity.

At the Tribunal, lawyers representing both Eksom and the merging companies announced that pre-hearing discussions had resulted in an agreement on a separate but confidential negotiation process that would govern the future relationship.

Eksom advocate Rafik Bhana confirmed that the utility firm would not be continuing with its intervention.

It was reported that in a joint media statement, Eskom and Glencore said the agreement "establishes a framework within which the two companies will cooperate with each other on a mutually beneficial basis and govern the interaction between them regarding existing and future coal supply agreements".

The news came on the same day that Xstrata and Glencore published an update stating that the time frame for the proposed merger had been extended for a third time.

MF