Mining-trading mega-merger now finalised « Mining Blog

Mining-trading mega-merger now finalised

21. November 2012,

Finally, it’s happened. The long-awaited merger between the world’s biggest metals trader and one of the world’s largest mining companies was concluded yesterday.

On Monday the London Mining Network posted its warnings about the consequences of this mega-deal:

Reaction to merger proposal of Glencore and Xstrata

London Mining Network press release

19 November 2012

On Tuesday 20 November, shareholders of mining giant Xstrata are due to vote on the proposed $33 billion takeover by Glencore. London Mining Network, a civil society group that monitors the impacts of London-listed mining companies is raising concerns over the environmental and human rights impacts of the two companies, and asking if the newly merged “mining monster” will be able to act with even great impunity in future.

Richard Solly, the coordinator of London Mining Network issued the following statement:

“Both Glencore and Xstrata have extremely poor environmental and human rights records. Glencore’s Colombian subsidiary, Prodeco, is associated with paramilitary land-grabbing and the violent repression of civil society. In Zambia its mining and smelting operations have been criticised for illegal toxic pollution of air and water which has resulted in the hospitalisation of numerous local people, while the company has done its best to avoid paying taxes. There are more such controversies associated with the company in Peru, the USA and the Democratic Republic of Congo.

Xstrata’s operations have a similarly blemished record. At the Cerrejon coal mine in Colombia it has benefitted from unjust removals of agricultural communities to make way for mine expansion, while in Peru it is embroiled in violent conflict with the local community at Tintaya over fears of pollution from its copper mine. Protests have led to killings and illegal detention of mining opponents. In the Philippines, the wife and children of a local tribal leader who is opposing the entry of the company’s Tampakan mine have been killed while they slept by army elements who have been sent in to ‘restore order’ and protect the mine.

Glencore and Xstrata are each already huge companies in their own right. Together, they will combine metals production and metals trading, exerting control all along the mining value chain (particularly in the production and trading of thermal coal). At a time when there are concerns that banks have become too big to fail, mergers within the mining industry are creating beasts of companies who have enough market muscle to exert monopolistic tendencies. In May this year, Glencore’s Chief Executive Ivan Glasenberg talked about how the mining industry can counter growing attempts by developing countries to get a better share of mining tax revenue. How much of a better position will the new Glenstrata be in to get its own way?

If Glencore succeeds in swallowing Xstrata our fear is that the combined company’s approach to human rights, community rights, worker rights, Indigenous rights, environmental pollution and taxation will be a combination of the lowest standards applied in each company – a real Frankenstein’s monster of a company, but with a less developed conscience.”

For more information or comment, contact Andy Whitmore on 0775 439 5597 / whit@gn.apc.org

** ENDS **

For more info on Glencore’s controversial environmental and human rights record, see: http://www.minesandcommunities.org/list.php?r=333

For more info on XStrata’s controversial environmental and human rights record, see: http://www.minesandcommunities.org/list.php?r=851

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