Wednesday, February 9, 2011

Commodity Boom helped Xstrata to see soaring profits

Xstrata The commodity bang had sent profits rising at mining powerhouse Xstrata as speculation increased over the future of its biggest shareholder Glencore.

The Anglo-Swiss company stated that it has seen an eighty six per cent jump in profits for 2010 to $5.15billion (£3.2billion) after a thirty four per cent rise in revenues to thirty and a half billion dollars.

It was boosted by the rising price of raw materials such as copper and coal which reached a record ten thousand dollars per ton in the last week.

High commodity prices have helped to see profits at Mount Isa mine of Xstrata that is located in Australia

The FTSE 100 giant also saw the benefits from restructuring and a record year of cost- savings of five Xstrata. hundred and forty one million dollars under chief executive Mick Davis.

The results and a proposed dividend of twenty five cents per share will be greeted happily by, the Swiss commodities trader, Glencore, that owns thirty five per cent of Xstrata.

Glencore, the largest commodity trader of the world thought to be worth about sixty billion dollars and it is preparing to list in London this year.

But it is clear that Ivan Glasenberg, its chief executive officer who is thought to have a fortune of ten billion dollars tied up in Glencore, would prefer a merger with Xstrata.

The block for the merger however might arise as regards to the balance of power between Davis and Glasenberg lying in the combined company.

Davis will not be interested on Glencore's plans to list in London. He stated that they do not have any greater insight than the market has.

The Xstrata boss has plans of increasing production by fifty per cent by 2014 and is working on twenty new mines and big expansion projects valued at eighteen billion dollars.

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