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Xstrata set to seize control of Falconbridge

ANDY HOFFMAN AND JACQUIE MCNISH

From Monday's Globe and Mail

Latest comment posted at 7:13 PM EDT 14/08/06

When $18-billion takeover offer expires Monday night, Anglo-Swiss company plans to realign international assets with Falconbridge's under umbrella of Toronto head office ...Read the full article

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  1. Jean-Francois Gouin from Toulouse, France writes: Thank you very much on your great coverage of the on going battle within the mining industry. It is a rather fascinating story in a context of decreasing availability of mega-project for metal mining around the world. Regarding your comment on Xstrata’s commitment to the Koniambo project, the comparison with the socio-political situation in Goro seems rather unfounded. Indeed, the partnership between Falconbridge and locally owned SMSP, is designed to avoid political opposition by ensuring that the local population benefits from the project. In fact, the Kanaks from the north province, where Koniambo is located, have long been waiting for this project as a promising opportunity for economic development. While there is indeed a lot of uncertainty around Koniambo, the president of SMSP declared in “Le Monde” last week that Xstrata’s leadership assured him of their intention to go ahead of the project.
  2. J Kooman from Toronto, Canada writes: One of the concerns will be to avoid this breakdown of Faclonbridge becomes a quick sell-off of valuable assets, cash-drained and run, and leaving behind contaminated mine site not fully reclaimed to Canadians - you and me. This is of particular concern given the long history of Noranda and Falconbridge operation in Canada. A long list of mines still require reclamation works and continuous attention include Heath Steel Mines, Bathurst Mine, and Brunswick Mine in New Brunswick, Boss Mountain Mine, Brenda Mine, and Bell Mine in BC, Geco-Wilroy Mine, Mattabi Mine and dozens of Sudbury mines in Ontario. Not that Falconbridge did not show that it is a good Canadian corporate citizen, but Canadians deserve not to foot the billion of dollars of clean up bills. There is an expensive lesson Canadians learned from the Giant Mine in Northwest Terrorities. There is a bill of about 1 to 2 billion dollars to be paid for arsenic contamination to be removed and treated, and a company with nil assets to cover it. http://www.miningwatch.ca/index.php?/Arsenic/Giant_Mine
  3. TERRI ROBSON from Kimberley,, Canada writes: This is exactly why there should not be an Xstrata takeover, this is nothing more than greed by Mick Davis.The Canadian SEC needs to change it rules on acquisition takeovers that serve no purpose other than to build a monopoly.
  4. Paul Tucker from Canada writes: If the US Congress can block the sale of UNOCAL to the Chinese in the name of national interest, why can't Canada block the loss of Falconbridge/Noranda and INCO into foreign ownership. I usually don't believe the Government has any business in Mining but in this case I could make an exception. #2. comments about reclamation is quite valid in light of a very rich Anglo American being able to slip out of any environemntal liability at Hudsons Bay Mining & Smelting in Flin Flon, MB. If INCO goes to CRVD then Teck Cominco won't be far behind. The best deal was the 3 way all Canadian merger but egos got in the way of that. Now all three may go into foreign ownership.
  5. Mel Garejo from Toronto, Canada writes: People from Canada lack the testosterone necessary to say not to things like this. How is this in the benefit of any Canadian? Thank you Industry Canada, you guys did a GREAT JOB giving our country away!!!
  6. Michael Richardson from Montreal, Colombia writes: I have no usual comment as to Foreign takeover decisions, but this is a touchy point for me. How does this benefit Canada? Our capital markets are teeming with small miners that are eager and anxious to form larger companies. When two Canadian companies want to merge, then Europe throws up a red flag and drags its feet for 9 months. Even when Alcan tried to buy Pechiney they had to sell the 6 billion dollar rolled products division, making them stay No. 2 in the world behind Alcoa. Our Industry Canada is ready to rubber stamp anything. Do they not understand that we are at an inherent disadvantage here in Canada and our companies need to be protected, even if only as little. Smaller capital markets and less population, as well as close proximity to the United States = smaller companies vulnerable to take-overs. Wake up and smell the international reality. Take a stroll down the Forbes 2000, and tell me where the first Canadian company ranks in Assets, Sales, Profit, or Market Value. Then compare that to other places of our size where tighter restrictions are in place. It's sad, depressing, and tortuous to find out the biggest company in Canada, the Royal Bank is a paltry 83rd in the world. Are we to singularly renounce our business culture to be second rate? I've already let Falconbridge go, but this will go down in history as one of the biggest f*** ups in Canadian corporate history. The comment about Teck and INCO following suit is absolutely correct. What is Teck Cominco going to do against CVRD. 15 billion Market Value vs. 55 Billion. Somewhats got a little more honey to put on the table and investors love those short term gains on stock. Got to love the idiots who buy stock to sell it two months later. Leaches is more the word, and Canada seams to have sttracted the largest crowd. Why? Because the companies are small enough and the securities laws are lax enough to allow for the easy pirating of our corporate infrastructure for a quick buck!!!

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