Glencore, Xstrata rise on reports of merger approval from China

Glencore International and Xstrata saw their shares surge on Tuesday as the companies were said to be close to clearing the final regulatory hurdle in their multi-billion-dollar merger.

Glencore International and Xstrata saw their shares surge on Tuesday as the companies were said to be close to clearing the final regulatory hurdle in their multi-billion-dollar merger.

The mining companies were expected to agree to concessions this week to soothe Chinese fears over its control on the supply of copper. A deal would end months of negotiations between the nation and the miner.

Analysts said an agreement was likely to involve sale from among Xstrata's greenfield copper projects, which could include Las Bambas in Peru, due to begin production in 2015.

Sources told Reuters a solution might also involve giving China a guaranteed slice of the group's copper production.

Xstrata is the world's fourth-largest producer of copper. It aims to increase output by more than 50% from 2011 levels by 2015, on the back up of projects like the $5.2bn Las Bambas mine ramp up.

A merger between the two producers would account for around 7.0% of global copper supply, which is expected to increase with mines in Australia, Peru and Chile.

A spokesperson from Glencore declined to comment when reached by Sharecast and Digital Look.

Glencore and Xstrata were trading 4.38% at 4.83% higher, respectively, on Tuesday morning in London.

Stocks across the whole mining sector were making gains early on after suffering heavy falls the day before as commodity prices dropped on the back of disappointing growth figures from China.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Investors are shunning UK stocks – but they might regret that in a year’s time
UK stockmarkets

Investors are shunning UK stocks – but they might regret that in a year’s time

There are a number of reasons why investors aren't buying UK stocks, says John Stepek. But they may want to rethink that strategy.
29 Sep 2020
Are we really in a stockmarket bubble?
US stockmarkets

Are we really in a stockmarket bubble?

The rise of “cash shell” companies, sky-high valuations – everything seems to point to a stockmarket bubble. But all may not quite be as it appears, s…
28 Sep 2020
Two commodities that could lie at the heart of the next resources bubble
Energy

Two commodities that could lie at the heart of the next resources bubble

Commodities tend to move in cycles. And if you can identify early on which ones are about to surge in demand, you can profit handsomely. Dominic Frisb…
30 Sep 2020