Glencore: Set to make first post-IPO purchase with stake in Marcobre

18th July 2011

The website quotes Daniel Mate, co-head of Glencore's zinc, lead and copper division saying: "Mina Justa would ideally complement Glencore's existing polymetallic mining operations in Peru, and add significant value to our world-wide group of copper mining assets."

The WSJ notes that Glencore already owns and operates the Iscaycruz and Yauliyacu zinc, lead and silver mines in Peru's Central Highlands through its 97% subsidiary Los Quenuales.

Its other copper assets are in Kazakhstan, the Philippines, Australia, Zambia, Argentina and Congo.

A few days ago, the firm posted its first set of results, which disappointed some analysts, reported here on Market Watch, though it used the occasion to deny speculation it was considering a bid for Kazakh-focused miner Eurasian Natural Resources Corp PLC or that it was in firm talks with Anglo Swiss miner Xstrata about a potential tie up.

4 thoughts on “Glencore: Set to make first post-IPO purchase with stake in Marcobre”

  1. Anonymous says:

    Neville – an insightful article. Kim Stephenson and I have been discussing this and other matters on Mindful Money and when you have time, have a look at our thoughts and comments. Briefly, my view is that salary/bonus levels need to be tied to the degree (level?) of good that an institution (e.g. a bank) and by extension it staff “donate” to the public good. That “level” is determined not by the institution but by those to whom “good” has been done. Perhaps this view may be considered extreme but awarding salaries/bonuses on criteria set in-house is not a particularly appropriate message to be sending to the general public in these straitened times…… 

  2. Neville White says:

    Thanks Ray. You raise interesting points about social utility and wider corporate values that might be linked to pay metrics. I think these ideas are at a very early stage, given only a minority of companies have performance linked to ‘soft’ metrics such as curtomer delight. H&S is an obvious ‘hook’ for linking pay and performance and this happens routinely in the extractives sectors, but hardly ever elsewhere. We are pondering the ‘Fidelity proposition’ launched in the FT yesterday, which has some merit. Personally, I think society needs a hard look at what is a fair reward for a good job done, the value of the individual over the team (differentials are a problem) and what is the meaning of ‘excessive’ in modern society.

    1. Anonymous says:

      Neville – thanks for your response. To pick up on one point you mention, that of “fair reward”. I think this is a tough area since one persons view may be totally at odds with others. However, building on “fair reward for a ‘good’ job done” in my mind this equates with my earlier post. A ‘good’ job is that which shows both quantitatively and (more importantly) qualitatively, that an individual and/or team has met agreed performance criteria both internally within the organisation and externally to the wider populace. Currently, the quantitative criteria have become the “be all and end all” whilst in the majority of cases the qualitative ones have been ignored as being “too hard to measure”. I would welcome your views (eventually) on the “Fidelity Proposition”.

      1. Neville White says:

        Thanks Ray. There is clearly some momentum building and Fidelity’s strong endorsement without the usual industry caveats is a game-changer. My worry is possible mixed messages; over the past two decades shareholders have encouraged a strong component of variable remuneration linked to company performance, and I worry that amidst the noise companies will simply revert to upward-only fixed remuneration as the default (we have seen this in the past few years as bonus levels have shot up as long-term awards failed to vest). Short-term incentives (annual bonus) are usually entombed in mystery as far as detailed performance hurdles are concerned for ‘market sensitive’ reasons – we have to decide the level of visibility required around annual bonuses. On long-term incentives I believe strongly there needs to be an underyling ‘state of the business’ test before grants are made, these should then be tested over five years (currently the default option is more often than not to make an annual grant at the maximum level irrespective of underlying performance). A forward looking binding vote would in my view probably do the most to solder shareholders to the overall architecture of pay by giving them a muscular incentive to police forward looking share awards. I would also concur with the 75% level required to make it ‘sticky’. Finally, we need to get away from the idea that executive pay can only ever go up as though it was a commercial rent; society, the market and legislators still await an informed debate on how much is too much. Best, Neville

Leave a Reply

Your email address will not be published. Required fields are marked *