Glencore Xtrata boss talks up merger savings
AFP · 10 Sep 2013, 11:19
Published: 10 Sep 2013 11:19 GMT+02:00
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"We have successfully and rapidly completed the integration of Xstrata, identifying at least $2 billion of synergies by 2014," company chief executive Ivan Glasenberg said in a statement issued on Tuesday.
The group, which came into being with a mega merger in May between Swiss commodities giant Glencore and Xstrata, a Switzerland-based mining company, thus expects to easily surpass the some $500 million in savings it had initially expected to draw from the fusion.
The company, which was holding its first Investor Day on Tuesday, also said it had completed the melding in the space of just three months "with no operational disruption."
Glencore Xstrata said that it, as previously forecast, would pocket $450 million from marketing synergies, adding that the merger would also allow it to rake in $175 million from financing synergies and $1.4 billion through cost savings.
The company also said it planned to slash its capital spending by a full $3.5 billion between 2013 and 2015.
This amount excludes the Las Bambas mine in Peru, which Glencore Xstrata will sell off next year, in accordance with a condition set by Chinese regulatory authorities before they green-lighted the fusion between the two Swiss companies earlier this year.
"Glencore will have a diversified and defensive asset base with an increasingly strong cost-curve position," Glasenberg said.
The company confirmed that Xstrata greenfield projects had "been deprioritised with a material reduction in scope and costs."
After the long-delayed merger finally went through Glasenberg made no secret of the fact that the new company would focus mainly on brownfield projects, which are less costly to bring to profitability.
Shortly after the merger went through, the group began cutting deeply into Xstrata's activities, dropping for instance an Australian carbon terminal project.
Glencore Xstrata also said Tuesday that it planned to apply for a listing on the Johannesburg Stock Exchange, stressing though that its primary listing would remain in London.