Anglo-Swiss, mining group Xstrata yesterday promised investors that it will continue to seek "major" acquisitions, despite two months ago withdrawing a bid to merge with Anglo American. The company, which targets coal and copper, also said that it would also increase its capital spending next year by 89 per cent to take advantage of rising global commodity prices. Xstrata will spend a total of $6.8bn in 2010, while it is also considering a sale of its four copper smelters.
Hosting an investor seminar at its Zug headquarters, Xstrata told shareholders that the group would aim to increase production by 50 per cent in the four years to 2013. The group's shares have outperformed the rest of the mining sector in recent months as coal and copper prices have jumped on better than expected demand, particularly from China.
Most interest is likely to come from the group's express commitment to continue to look for merger and acquisition deals. The announcement is likely to fuel speculation that Xstrata will have another tilt at Anglo American next year when the Takeover Panel-imposed restriction on merger talks ends, or at Lonmin, in which Xstrata already holds nearly 30 per cent.
Since failing to persuade enough Anglo shareholders that its "merger of equals" offer was sufficiently enticing, Anglo has moved to sweeten shareholders with a number of moves, such as promising to sell off poor assets.Reuse content