Xstrata
| Company type | Public limited company |
|---|---|
| Industry | Mining |
| Predecessor | Südelektra |
| Founded | 1926 in Switzerland |
| Defunct | May 2, 2013 |
| Fate | Acquired by Glencore |
| Successor | Glencore plc |
| Headquarters | Zug , Switzerland |
Area served | Worldwide (19 countries in Africa, Asia, Australasia, Europe, North America, South America) |
Key people | Mick Davis (former CEO), Willy Strothotte (former chairman), Ivan Glasenberg (board member) |
| Products | Thermal coal, copper, nickel, primary vanadium, zinc, ferrochrome |
| Owner | Public shareholders (until acquisition) |
| Parent | Glencore plc (from 2013) |
Xstrata plc was a multinational mining corporation with Anglo-Swiss origins, headquartered in Zug, Switzerland, and its legal domicile located in London, United Kingdom. It stood as a foremost producer and the world's top exporter of thermal coal, alongside being a significant supplier of copper, nickel, primary vanadium, zinc, and the largest global manufacturer of ferrochrome. Xstrata's operations spanned 19 countries across Africa, Asia, Australasia, Europe, North America, and South America.
The firm was publicly traded on the London Stock Exchange and featured in the FTSE 100 Index, boasting a market value near £29 billion as of December 2011, which positioned it as the 16th-largest entity on the exchange. Additionally, it maintained a secondary listing on the SIX Swiss Exchange. According to the 2013 Forbes Global 2000 rankings, Xstrata was the 202nd largest publicly listed company globally.
On 2 May 2013, Glencore completed its acquisition of Xstrata, after which the Xstrata brand was discontinued and the combined entity renamed from Glencore Xstrata plc to Glencore plc.
The Xstrata brand persists through Xstrata Mexico, a Mexican foreign capital company.
History
Established in 1926 in Switzerland under the name Südelektra, the company initially concentrated on infrastructure and electricity projects within Latin America.
In 1990, majority ownership was acquired by Marc Rich + Co AG. During the 1990s, the company diversified into mining activities while divesting from non-core sectors.
Mick Davis took over as CEO in 2001. The company went public on the London Stock Exchange in 2002 and acquired coal assets from Glencore located in Australia and South Africa. By that time, Glencore held a 40% stake in Xstrata.
In 2003, Xstrata's size doubled through a A$2.9 billion purchase of Australian copper, zinc, and lead miner MIM Holdings. However, its 2005 attempt to acquire Australian miner WMC Resources was unsuccessful as BHP secured the deal.
The Windimurra Vanadium plant in Western Australia was shut down by Xstrata in 2004. This closure increased vanadium prices for other mines worldwide but led to considerable job reductions.
In August 2005, Xstrata acquired a 19.9% shareholding in Canadian diversified miner Falconbridge Limited. Following a competitive takeover contest with Inco Limited, Xstrata obtained the remaining 80.1% stake by August 2006.
Australian regulators approved expansion plans for the McArthur River zinc mine in 2006, which included diverting a river to facilitate a large open-pit operation. Though traditional owners legally challenged this project, retrospective legislation overturned court rulings allowing development to proceed.
In May 2012, protests erupted over water contamination linked to Xstrata's mining operations in Peru's Espinar Province, resulting in violent confrontations and two civilian fatalities. The government responded by declaring a State of Emergency and suspending constitutional civil rights.
Following its acquisition by Glencore on 2 May 2013, Xstrata's CEO Davis and his executive team stepped down.
Despite ceasing mining activities in 2015 and shifting focus to agribusiness by 2016, Xstrata Mexico—founded in 2011 to pursue iron ore mining—continues to operate under the Xstrata name.
Operations
Following the year 2000, the company transformed from a modest participant into one of the globe’s most extensive and diversified mining conglomerates through a succession of significant acquisitions. By 2008, its Transnationality Index reached 93.2%, securing the top position worldwide. The firm managed key projects across eighteen nations, including Australia, Brazil, Canada, Chile, Germany, South Africa, the United States, and the United Kingdom. It was a prominent producer of copper, coking coal, thermal coal, nickel, ferrochrome, vanadium, and zinc, while also maintaining smaller stakes in aluminum, gold, lead, and silver. Additionally, it owned a 24.9% interest in Lonmin, providing exposure to platinum group metals.
In July 2012, Xstrata inaugurated its inaugural office on mainland China in Shanghai to strengthen support for a market that accounted for up to one-third of its worldwide sales.
Bulga Coal
Since acquiring Enex Resources Limited from Glencore International AG in 2001, Xstrata has operated the Bulga Coal Mine located in New South Wales, Australia. This site functions as the headquarters for Xstrata Coal’s operations within NSW.
Mangoola Coal Mine Controversy
Xstrata Coal purchased the Mangoola coal mine in Hunter Valley from Centennial Coal in 2007. The company encountered media criticism related to its handling of the mine’s pre-development stage, particularly concerning engagement with local communities. Accusations of deceptive conduct resulted in opposition from residents and led to the establishment of the Wybong Action Group (WAG), highlighting conflicts between Xstrata and local stakeholders during project advancement.
George Fisher Mine
In October 2010, the Queensland government granted approval for Xstrata’s A$274 million expansion initiative at the George Fisher mine near Mount Isa.
Relationship with Glencore
Upon Mick Davis assuming the role of CEO at Xstrata in 2001, Glencore owned 40% of Xstrata’s shares and acted as its marketing representative. By 2006, Glencore executives Willy Strothotte and Ivan Glasenberg had joined Xstrata’s board of directors, with Strothotte serving as chairman.
In June 2012, due to shareholder resistance against a substantial retention bonus package for executives involved in the proposed merger, Glencore and Xstrata reconsidered payouts exceeding GBP 170 million allocated to 73 senior executives. Consequently, the shareholder vote to ratify the merger was deferred from July until September 2012.
After completing the merger, Xstrata’s CFO Trevor Reid transitioned from his employee role to become a consultant following an eleven-year tenure, marking a strategic leadership change as the company moved beyond Reid’s era.
The Xstrata name
The brand name Xstrata—symbolizing its focus on mining and extraction—was developed in 1999 by British graphic designer John Lloyd of Lloyd Northover. Subsequent to the merger, Glencore declared the retirement of the 'Xstrata' brand; currently, Glencore Xstrata plc operates exclusively under the name Glencore plc.