Magazine article New Statesman (1996)

All Back to Mine

Magazine article New Statesman (1996)

All Back to Mine

Article excerpt

In case you missed it, the mining and trading giants Glencore and Xstrata are in the middle of a [pounds sterling]37bn merger. It's been an interesting ride, not least because of added "Blair factor". The former prime minister took time out from his other peace-brokering/oil-deal brokering commitments to help smooth talks between the two companies, and was reportedly paid nearly $im ([pounds sterling]62.5,000) for the gig: a three-hour meeting at Claridge's in Mayfair.

It worked though: a few persuasive words to Glencore, and the company gave in to Xstrata's new demands, making Blair, according to Business Insider, quite the "international corporate fixer". Blair's new career, using his Rolodex of contacts to cash in, has provoked blistering criticism from his former colleagues, including the former Blairite law-maker Michael Meacher, who told Reuters that such behaviour was "extraordinary in a so-called Labour ex-prime minister".

But the negotiations look to have almost as many complexities and intrigues as the would-be result of their union, and they can't all be fixed by Blair. Here's a breakdown.

First, there's the internal politics: Glencore's boss, Ivan Glasenberg, has made it a condition of the merger that Mick Davis, Xtrata's chief, leave the company. But the two men are former friends--they met at the University of the Witwatersrand in South Africa and initially decided on the merger over dinner. To add insult to injury, Davis would have to leave without his [pounds sterling]30m "golden handcuffs", though he is likely to get [pounds sterling]8m in cash and [pounds sterling]38m in shares.

There have been allegations of corruption about both companies: Panorama ran an episode on Glencore's deals in the Democratic Republic of Congo, which included the alleged use of child labour. (Glencore denied this.) Xstrata has been accused by protesters in Peru of polluting water supplies with heavy metals, something it denies. …

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