Major management shake-up looms in SMI
GENERAL SANTOS CITY, Philippines - Don’t look now but a major management shakeup could take place in Sagittarius Mines Inc. (SMI) once the long anticipated merger between the world’s 4th largest copper producer and one of the world’s biggest commodities firms is completed within the year.
Although the expected March 15 merger deadline between Xstrata Plc and commodities giant Glencore has been put on hold until further announcement from both parties, leadership row in the merged company has already claimed the scalp of Xstrata CEO Mick Davis who will be replaced as its top guy by Glencore chief Ivan Glasenberg.
In a report from the Financial Times, Davis rued that the deal is reportedly already “a takeover and no longer a merger – that’s the reality of it.”
The statement came after a US$200 million pay package for the retention of Xstrata executives was thumbed down by investors from both camps.
Glencore and Xstrata are still hammering out details of the merger that has been delayed for over a year now.
The $90 billion deal will position the merged company in the Top 4 mining firms in the world.
Financial analysts said the merger will eventually push through this year as the deal is often described as a behemoth deal “too big to fail.”
The multi-billion big ticket deal could also affect the ownership and management of SMI, owner of the world-class Tampakan Copper and Gold Project.
Xstrata Copper, a subsidiary of Xstrata Plc, controls 62.5% of SMI.
The rest of the SMI stake is owned by Australia-based exploration company Indophil Resources NL.
Indophil Resources, in turn, has minority Filipino shareholders that count among them PLDT’s Manny Pangilinan, San Miguel Corporation, SM’s Henry Sy and the Alcantaras.
A highly-placed source who requested anonymity as he is not authorized to issue any statement said a revamp in the management of SMI could also follow once the Glencore-Xstrata merger deal is completed.
SMI is locked in a legal tussle with the South Cotabato provincial government which, in 2010, passed an ordinance banning open pit mining.
The mining company has already postponed its commercial production target from 2016 to 2019 due to its failure to secure government permits. But it was recently issued an environmental compliance certificate by the Department of Environment and Natural Resources.
The Swiss-based Glencore will be the 5th foreign company to join the Tampakan project.
The original Financial Technical Assistance Agreement (FTAA) was originally owned by Western Mining Corporation in 1995 before its rights were sold to New Zealand-based MIM Holdings.
MIM holdings was later joined by Indophil Resources NL (Australia) in the Tampakan Mineral Resources Corporation that eventually became SMI.
In 2007, Xstrata Copper, which financed the exploration activities of SMI, exercised its options and acquired the shares of MIM which made it the controlling company of SMI.
Xstrata has since kept control over SMI management and operations.
SMI spokesman John Arnaldo declined to issue any comment.
He said, "as the merger is not yet completed, we are not able to comment." - Rappler.com