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%

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.

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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

I would say the hunter, but in an amicable way (i.e. not a hostile takeover):

"Xstrata confirms that its ongoing interaction with other industry participants includes dialogue with a number of parties covering a range of topics of mutual interest such as industry consolidation,' Xstrata said
Xstrata chief executive Mick Davis is also understood to be trying to interest Anglo American PLC in a deal, they said."

Snippet from Saturday's (19th Jan) Times:
"Xtrata was the top performer, up 266p at 33.63 on speculation that Vale, of Brazil, had cancelled a road show next week to finalise a bid."

In the Sunday Times today, almost as a footnote to article re BLT and RIO:
"Meanwhile, Companhia Vale de Rio has started due diligence on a potential bid for Xstrata."

just hope it's not some depraved individual indulging himself with lascivious thoughts on how to make himself millions when everyone dives in

actually both XTA and RIO could/should make interesting punts for the early birds

More likely a salacious individual not wishing to deprive herself of the rewards she may reap from having already plunged in

totally scandalous ... most depraved behaviour that ill-becomes a gentlewoman

so Ms Toya, did you catch all those blokes with their knickers down? ...... i confess to being amazed that XTA opened on such a down note .... guess it's because the chinese are playing hardball re iron ore prices, or at least i can think of no other reason.

anyway, have just bought in fairly modestly at 3209, as the fall looks unwarranted and if the much-touted bid does materialise, it will surely be at a much higher price than currently enjoyed (perhaps an interesting choice of word!)

XTA briefly touched 3500 this morning, now still above 3400 so you and I both in profit Cynic - enjoy it while we may!

Info in The Observer over the weekend:

Link to Observer article 20 January 2008

Cor, cynic. Hope you were watching your screen. Could have made 5% this morning, but now heading in to negative territory.

thought of taking a very juicy instant profit before i left the office for 3-4 hours but determined, perhaps wrongly against it ..... however, i invested fairly cautiously and at what looks a good price so am still in the money