Xstrata is a major global diversified mining group. Xstrata maintains a meaningful position in six major international commodity markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Groups operations and projects span four continents and seven countries: Australia, South Africa, Spain, Germany, Argentina, Peru and the UK.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 31/12/2005)

Coal:       42%
Copper:    25%
Zinc:       18%
Chrome:   10%
Vanadium: 4%
Others:     1%

Sounds like they've missed out.

The Times - June 27, 2006
From Eric Reguly in Toronto

Xstrata thwarted in its bid for Canada's Falconbridge


THE global ambitions of Xstrata, the Anglo-Swiss mining group in pursuit of Falconbridge, of Canada, were dealt a blow yesterday when Phelps Dodge, of the United States, agreed to buy both Falconbridge and its rival Inco for $40 billion (22 billion).

The three-way merger will create the biggest publicly traded copper and nickel producer, with annual combined sales of more than $25 billion, almost $8 billion in operating profits and 40,000 employees in 40 countries.

The new company, to be called Phelps Dodge Inco, will have its headquarters in Phoenix and will trade on the New York and Toronto stock exchanges.

With an enterprise value debt and equity of $58 billion, Phelps Dodge Inco will be the fifth-largest mining group, after BHP Billiton, Rio Tinto, Anglo American and CVRD, of Brazil.

Xstrata, which has bid C$52.50 a share in cash for the 80 per cent of Falconbridge that it does not already own, would not comment on its options, but executives close to the company said that Xstrata should not be ruled out of contention. They still have the only all-cash bid on the table and have the capability to go higher, one said. Its not over and they still have some time.

Would it be interesting if this company itself became a target for bidders from the likes of RIO?....or someone?

TORONTO, Jun 30, 2006 (The Canadian Press via COMTEX)

Falconbridge's shareholder rights plan will stay in place for now, OSC says


Falconbridge Ltd. (TSX:FAL) can keep its poison pill defence for now, Ontario's securities regulator decided Friday, denying Xstrata PLC (LSE:XTA) relief from one hurdle in its path to buying the Canadian mining giant.

That Ontario Securities Commission decision on the poison pill followed an Ontario court ruling that dismissed an application by Swiss-based Xstrata to force Falconbridge to hold an early annual meeting.

Xstrata owns 20 per cent of the Toronto-based copper and nickel producer has made a $52.50 Cdn all-cash bid for the rest of Falconbridge, which is at the centre of a major battle involving some of Canada's biggest mining companies.

Falconbridge and one-time rival Inco Ltd. (TSX:N) have been trying to complete a friendly merger since October, but progress on that deal has been stalled by regulatory delays in Europe.

On Monday, the Inco and Falconbridge struck a friendly $40-billion-US deal with U.S.-based Phelps, which has offered to buy both Inco and Falconbridge.

Also waiting in the wings is Vancouver's Teck Cominco Ltd. (TSX:TCK.B), which has made a $17.8-billion bid for Inco - on the condition it drop the Falconbridge deal.

The OSC said Friday the poison pill will remain in place until Xstrata takes up sufficient Falconbridge shares to meet its "majority of the minority condition," or until July 28.

"The Commission's decision to limit Xstrata's statutory rights until the 28th July is particularly hard to understand, given that it confers a distinct unequal advantage to Inco, whose offer closes two weeks prior to this date," Xstrata spokesman Marc Gonsalves said Friday.

"Xstrata will consider its position in the light of this (OSC) ruling, but we are clear that the SRP has to be set aside for Falconbridge shareholders to be free to accept our offer," Gonsalves said.

Xstrata had gone before the Ontario regulators on Tuesday, seeking to have the plan terminated because, it claimed, Falconbridge had failed to secure the necessary shareholder approval.

It also argued the plan deprived Xstrata of its right to buy additional shares.

Falconbridge's poison pill prevents a prospective acquirer from slowly increasing its stake in the company, by essentially flood the market with new shares, making a hostile takeover prohibitively expensive for an acquiring company.

It's triggered when someone acquires or announces its intention to acquire 20 per cent or more of the company without approval of the board.

Falconbridge has maintained the continued existence of the plan was in the best interest of shareholders, saying Xstrata's application was motivated by a wish to acquire the firm without offering a premium to all shareholders.

The panel did not release details of its decision Friday, but OSC lawyers had backed Falconbridge at a hearing Tuesday, saying it was in shareholders' interest to prevent Xstrata from buying just enough Falconbridge shares to block Inco's offer, shutting down the competitive auction process that now exists.

Xstrata's second blow came from Ontario Superior Court, which confirmed Friday that Falconbridge had acted in accordance with the Ontario Business Corporations Act Friday when deciding to hold its annual meeting in October - six months later than in previous years.

But Xstrata did get one piece of good news at a special meeting Friday, in which Xstrata stockholders with 555.9 million shares voted in favour of the Falconbridge takeover offer, while 975,248 opposed it and 5.6 million abstained.

The Xstrata and Phelps offers have been met with union and political opposition, and even Phelps's second-largest shareholder, Atticus Capital, said Thursday it may not back the deal.

"The main question I get from investors is about the debt level that Phelps will end up with," said Charles Bradford, and analyst with New York-based Soleil Bradford Research.

Phelps Dodge spokesman Stan Rideout said the company respects its shareholders views "and we strongly believe in the financial and strategic merits of our proposed combination with Inco and Falconbridge."

"We are confident that our shareholders will see the value of the transaction."

Daily Telegraph - By Cosima Marriner - (Filed: 04/07/2006)

D-day for Xstrata on Canadian bid


Crunch time is looming for Anglo-Swiss mining giant Xstrata, which must decide by Friday whether to increase its offer for Canadian nickel producer Falconbridge.

Falconbridge is the subject of a takeover battle between Xstrata and Canadian nickel company Inco, which is backed by US copper producer Phelps Dodge. Xstrata has offered $16bn (8.7bn) cash for the 80pc of Falconbridge it doesn't already own. Phelps Dodge trumped this offer last week, when it made a $40bn cash and share bid for Inco and Falconbridge.

Xstrata's hostile bid of C$52.50 (25.67) per Falconbridge share expires on Friday, a week before the friendly Phelps/Inco offer. Xstrata is currently deciding whether to extend the offer period, raise its bid, or walk away.

The company suffered a further setback late last week, when the Ontario Securities Commission refused to overturn Falconbridge's poison pill shareholder defence.

The regulator said the shareholder rights plan, which prevents creeping takeovers, could stand until July 28, two weeks after Inco's offer closes. Xstrata said this gave Inco "a distinct, unequal advantage".

Analysts expect Xstrata at least to match the Phelps/Inco bid, which yesterday had an implied value of C$58.42 per Falconbridge share. In this scenario, Xstrata's all-cash offer could be more attractive to Falconbridge shareholders than Inco's 70pc paper bid.

But Xstrata's chief executive Mick Davis has shown he will not pay over the odds for an asset, after he abandoned his tilt at Australian copper miner WMC last year when BHP Billiton made a higher offer. If Xstrata did walk away from Falconbridge, it would make a profit of $2bn on its existing 20pc stake in the company.

The Phelps/Inco bid is conditional on approval from the EU regulator, which could come as early as today.

Xstrata PLC
04 July 2006

INDUSTRY CANADA REVIEW PERIOD EXTENDED

Xstrata plc ('Xstrata') advises that it has been informed by the Investment
Review Division of Industry Canada that the Minister responsible for the
Investment Canada Act ('ICA') is unable to complete the consideration of
Xstrata's investment in connection with the proposed acquisition of Falconbridge
Limited within the initial 45 day period. As prescribed in the ICA, the Minister
has therefore extended the review period for up to a further 30 days (or such
other period as may be agreed) from July 3, 2006.

Mon Aug 21, 2006 9:10 AM BST148

Xstrata not looking at bid for Anglo


LONDON, Aug 21 (Reuters) - Swiss-based Xstrata was not looking at taking part in a possible bid for miner Anglo American, a source familiar with the situation said on Monday, denying a newspaper report.

"Xstrata have just bought Falconbridge and are focused on integrating that so they would not be thinking of biting something off as big as that (Anglo)," the source told Reuters.

The Observer newspaper said on Sunday, citing unidentified sources in London, that Xstrata, Brazil's CVRD and Rio Tinto were looking at a possible bid to break up Anglo American and had hired financial advisers.

The source said Xstrata had not hired financial advisers.

Xstrata declined to comment on the report.

Daily Telegraph - Market report - By Yvette Essen - (Filed: 07/09/2006)


Talk of a rights issue and open offer sent Xstrata shares falling 58p to 24.18. Dealers speculated the mining giant will have to raise $6bn (3.2bn) shortly.

Numis said: "We believe market expectations for the size of the equity issue post-acquisition of Falconbridge have declined markedly from $6bn-$7bn to $4bn-$5bn or even less. We think this is dangerous and maintain a base case of $6bn."

3 October 2006

Xstrata announces a fully underwritten rights issue of up to 235,787,596 New Shares at a price of 12.65 pence per New Share on the basis of one New Share for every three Existing Shares held on the record date of Monday, 2 October 2006.

The total net proceeds of the Rights Issue, after estimated aggregate costs and
expenses, are expected to be approximately 2.9 billion (approximately US$5.5 billion). The Rights Issue is being undertaken to refinance part of the US$7.0 billion Equity Bridge Facility arranged as part of the financing for the successful acquisition of Falconbridge in August 2006.

The Issue Price of 12.65 pence per New Share represents a 42.5% discount to the
closing middle-market price of the Ordinary Shares of 21.98 on 2 October 2006
(a 35.6% discount to the theoretical ex-rights price (TERP) of 19.6475).

Save in respect of New Shares which Glencore International takes up pursuant to the irrevocable undertakings it has given to the Company and pursuant to the separate underwriting commitment Glencore International has given to the Banks pursuant to the Glencore Underwriting Letter, the Rights Issue is fully underwritten by Deutsche Bank and, on behalf of its affiliate JPMorgan Cazenove, by J.P. Morgan Securities Ltd.

Glencore International and Credit Suisse Securities (Europe) Limited ('CSSEL') have the largest shareholdings in the Company, holding approximately 14% and 22% respectively of the Ordinary Shares. Glencore International has irrevocably undertaken to take up its full entitlements under the Rights Issue. In addition, CSSEL has agreed to transfer to Glencore International its entitlements in respect of 151,560,600 Ordinary Shares under the Rights Issue and Glencore International has also irrevocably undertaken to take up in full such entitlements. CSSEL (in respect of 151,560,600 Ordinary Shares) and Glencore International have agreed to lock-ups which, subject to certain exceptions, will expire six months after the latest time for acceptance and payment in full of entitlements to subscribe for the New Shares. A total of 84,200,333 New Shares are subject to Glencore International's irrevocable
undertakings (approximately 35.71% of the maximum number of New Shares to be
issued under the Rights Issue). Glencore International will be paid an underwriting commission by the Company of US$35.1 million in connection with its undertakings.

Dealings in New Shares, nil paid, are expected to commence on the London Stock
Exchange and on the SWX Swiss Exchange ('SWX') on Thursday, 5 October 2006. The expected latest date for acceptance and payment in full under the Rights Issue
is Friday, 27 October 2006.

The Rights Issue is conditional upon a number of matters that are typical for a
transaction of this nature. If these conditions are not fulfilled, the Rights Issue will not proceed. Shareholder approval is not required in respect of the Rights Issue following the passing of the resolutions at the Extraordinary General Meeting of the Company held on 30 June 2006. Shareholders who choose not to take up their rights under the Rights Issue will be diluted by approximately 33.3% following the issue of the New Shares.

Commenting, Mick Davis, Xstrata Chief Executive, said:

'The buoyant cash flow generation of the Enlarged Xstrata Group and our confidence in the prospects for the business following the first six weeks of ownership of the Falconbridge assets have exceeded our expectations. This has enabled us to reduce the size of the Rights Issue, from the anticipated US$7.0 billion required to be refinanced under the Equity Bridge Facility, to approximately US$5.5 billion net of expenses and is in line with our commitment to maintain an investment grade credit rating and a prudent capital structure that provides the flexibility to fund the enormous organic growth potential within our portfolio. The remainder of the Equity Bridge Facility will be funded through cash flow and/or through alternative means, which may include accessing the debt markets.

'We have been very encouraged by the quality of personnel and assets within Falconbridge since taking control and beginning the integration process into Xstrata's devolved business structure. The initial 30-day stage of that process is now complete and we have confirmed offers of positions with the Enlarged Xstrata Group or redundancies for all former Falconbridge employees.

'We have successfully established two new commodity businesses, Xstrata Nickel and Xstrata Aluminum, integrated the copper and zinc operations to form new business units within Xstrata Copper and Xstrata Zinc and appointed the senior executives across these new structures. Our teams have made excellent progress in transforming the businesses, realigning resources and responsibility within Xstrata's devolved business structure and identifying a number of exciting opportunities for further value creation for the Enlarged Xstrata Group. As a consequence, we believe there is upside potential for additional synergy benefits from the acquisition. The execution stage of our integration process is now underway and we expect this to complete at the end of this year, at which point we will be in a position to provide greater detail on the potential that we believe the Falconbridge Acquisition has delivered to Xstrata. Key priorities for this next stage, therefore, will be the completion of our review of the aluminium business, the ongoing identification and delivery of synergies and the development of the organic growth potential of the Enlarged Xstrata Group.'

AFX

LONDON (AFX) - Xstrata PLC said it is to raise 2.9 bln stg in a 1-for-3 rights issue of 235.8 mln new shares at 12.65 stg each.

Proceeds will be used to partly refinance a 7 bln usd loan which Xstrata secured to fund the acquisition of Canadian miner Falconbridge Ltd in August.

The rest of the money it needs to refinance the loan will come from cash flow and/or through alternative means, which may include accessing the debt markets, said Xstrata.

The issue price represents a 42.5 pct discount to Xstrata's closing middle-market price of 21.98 stg on Monday, it said.

Glencore International, which holds a 14 pct stake in the company, will take up its full entitlements under the offer, subject to a lock-up period of six months.

'The buoyant cash flow generation of the enlarged Xstrata Group and our confidence in the prospects for the business following the first six weeks of ownership of the Falconbridge assets have exceeded our expectations,' said chief executive Mick Davis.

'This has enabled us to reduce the size of the rights issue... and is in line with our commitment to maintain an investment grade credit rating and a prudent capital structure that provides the flexibility to fund the enormous organic growth potential within our portfolio,' he said.

Falconbrige, following the expiry of the offer by Inco Ltd for the company in July, paid Inco a break free of 150 mln usd in July and a further 300 mln usd in August.

Turning to current trading, Xstrata said it continued to trade well since end-June, with demand for commodities remaining robust.

'In the wider market, this demand, together with market supply constraints and long lead times to add new market capacity, has supported prices for the enlarged Xstrata Group's commodities significantly above long-term averages,' it said.

3 October 2006 - Source: Easy Bourse

Xstrata expects significant benefits from new assets


The finance director of Anglo-Swiss miner Xstrata PLC said Tuesday that the company has had a number of approaches for the aluminium assets it acquired as part of its recent purchase of Canada's Falconbridge, although he declined to name the firms involved.

Xstrata is "open to all outcomes for this business," Reid said.

The chief financial officer's comments come as the company unveils a $5.5 billion (GBP2.9 billion) one-for-three rights issue to refinance its acquisition of Canadian miner Falconbridge, announced in August.

Xstrata said it is experiencing significant operational benefits from the new assets and is increasingly confident that it will surpass the synergies expected when the firm first unveiled the deal.

Reid declined to quantify those synergies, but said Xstrata expects them to come from its copper and nickel divisions.

During the course of the Falconbridge deal, Xstrata said it would seek to collaborate with the eventual owner of the Sudbury basin nickel assets held by Canadian mining firm Inco Ltd. (N), which is in the process of being taken over.

Inco's Sudbury basin assets are located next to those of Xstrata and cooperation on exploiting the reserves could result in cost savings and other benefits, Xstrata has said.

Inco's board of directors Sept. 24 recommended that its shareholders accept a $18 billion all-cash offer from Brazilian mining giant Companhia Vale do Rio Doce (RIO), or CVRD, after a protracted bidding war for the company.

Xstrata has an "ongoing dialogue with all major mining companies," Reid said, adding that talks have continued with CVRD. But substantive discussions surrounding Sudbury haven't taken place.

Having had some contact at operational levels with Inco employees, Xstrata feels that there is "huge momentum" to put the businesses together.

The Times - October 04, 2006

Investors should dig deep for unbeatable Xstrata share offer - By Robert Cole (Tempus)


IT IS the bargain of the week, surely? If you own three shares in Xstrata, market price 22.46, you can buy another share for a knockdown 12.65. If the market price of shares remains unchanged, shareholders will make a pretty much instant 77 per cent return on the new money they put in.

The number of shares in issue after the 2.9 billion cash call will be expanded by a third so the shares currently in issue may be diluted in value. The theoretical ex-rights price, which adjusts for the dilution, is 19.65. But if the new shares issued at 12.65 move up only to that level, investors will enjoy a 44 per cent uplift.

That said, to judge by yesterdays upward movement in the market price, the stock may continue to trade above the theoretical ex-rights price. Xstrata shares rose more than 2 per cent yesterday, further than any other FTSE 100 share.

The investment decision is not quite as straightforward as it might appear. For one thing yesterdays market reaction is partly related to the unwinding of short postions taken by investors who believed that Xstrata shares would fall when the rights issue details were unveiled. Since shares did not come under pressure, the short sellers had to buy in order to cover their positions.

Investors also face the risk that Xstrata is taking opportunistic advantage of the fact that its shares are highly rated at present. As the graph shows, shares are trading near their record high and have risen very rapidly over the past year. It is instructive to note that Xstrata shares have traded at an average price of 18.01 over the past year and 11.77 over the past three years.

Xstrata shares also produce a 1 per cent dividend yield, compared with an average for the mining sector of 2.1 per cent and 3.5 per cent for the London market as a whole. That hardly suggests that the shares, at 22.46, are cheap. The fact that the company felt it neccesary to price new shares at such a large discount also suggests that it is concerned that investors might think the current market price is less than robust.

For all that, the 12.65 offer is too good to refuse. Especially since the company also said yesterday that the integration of Falconbridge, the nickel and copper miner whose purchase prompted the cash call, is advancing ahead of expectations. And because it painted an upbeat assessment of general trading conditions and its cashflows. Subscribe.

dai, can you enlight me how can I get onto the right issues play? I haven't hold any XTA at the moment but intend to get onto it.

Money is printed by central banks. It won't decrease, but change hands

China October Trade Surplus Hits Record
Monday November 12, 7:16 am ET
By Joe Mcdonald, AP Business Writer
China's Trade Surplus Jumps in October to New Monthly High of $27 Billion

BEIJING (AP) -- China's trade surplus jumped to a new all-time monthly high in October, according to official data released Monday, despite government pledges to restrain export growth and adding to pressure for action on trade barriers and currency.

ADVERTISEMENT
The report comes amid demands by some U.S. lawmakers for sanctions if Beijing fails to ease currency controls. The European Union says it also will press China for action at a summit this month.

China's trade surplus for the first 10 months jumped a massive 59 percent to $212.4 billion, according to figures released by the General Administration of Customs. The annual surplus already has surpassed the full-year record of $177.5 billion set in 2006.

October's trade gap rose to $27 billion, up 13.6 percent from the same month last year, according to the customs data. The previous monthly record high was $26.9 billion in June.

Chinese leaders say they are not actively pursuing huge surpluses and have imposed new taxes to restrain exports of steel, plastic and other goods deemed too dirty or energy-intensive.

Foreign demand for low-cost Chinese goods has stayed strong despite a string of foreign recalls and warnings over faulty or tainted Chinese goods ranging from toothpaste to tires.

The surge in import revenues has strained the government's ability to restrain pressure for prices to rise. The central bank drains billions of dollars a month from the economy through bond sales, and has piled up the world's biggest foreign reserves at $1.3 trillion.

China's trade surplus with the United States rose 12 percent to $15.7 billion on total two-way trade of $26.7 billion, according to the customs agency.

U.S. lawmakers are working on several proposed measures to impose punitive tariffs on Chinese imports if Beijing fails to take action on its currency controls.

The United States and other trading partners complain that China's currency, the yuan, is kept undervalued, giving its exporters an unfair price advantage and adding to the country's surpluses.

The surplus with Europe, China's biggest trading partner, rose nearly 50 percent to $13.9 billion on total trade of $31.4 billion, the agency reported.

A European Union delegation led by Prime Minister Jose Socrates of Portugal, which holds the 25-nation group's presidency, will press Chinese leaders for action to ease trade barriers and to let the yuan rise faster in value, EU Ambassador Serge Abou said Monday.

The comments reflected Europe's growing official urgency about China's swollen trade surpluses, an area where Washington has taken the lead in the past on lobbying Beijing.

China's imports in October climbed 25.5 percent from the same month a year earlier to $80.7 billion, according to the agency. Exports grew by 22.3 percent to $107.7 billion.

The United States reported a $232.5 billion trade deficit with China last year, its biggest ever with any country. The gap this year is on track to surpass that.

For the first 10 months of the year, China's total exports grew 26.5 percent to $985.84 billion, while total imports rose 19.8 percent to $773.48 billion.

HOC was up 10% earlier. Why?

talk of a 48 bid next week and a done deal!!

no question that there is almost certain to be significant consolidation in both oils and mining ..... the difficulty is to choose the right ones

with miners tumbling (again), XTA could make a reasonable buy when sp hits 25 (3325) or 50 (3365) dma as below

Yes possibly, but XTA is on the acquisition trail & much like the BLT/RIO saga, the predator sp seems to suffer, whereas the target seems to get a boost.
My guess is that the sp will fall nearer to the 3200p level, unless more M&A details are forthcoming.

all depends on whether XTA is hunter or hunted