Should i invest in xstrata

Yet the market was happy. It had expected worse. Challenges including rising labor and operating costs an industrywide problem , stronger producer currencies against the U.

Final date for the merger has been pushed back to April If it goes through, as expected, the new company will be the world's largest zinc miner, the third-biggest producer of mined copper, and largest exporter of coal burned by power stations.

Combining Xstrata's copper, nickel, coal, and zinc mines with Glencore's commodity trading expertise should bring diversification and cost savings. Who wouldn't want a piece of that? The joy of Xstrata Xstrata won't have made many investors rich lately.

Income seekers may be disappointed by its 2. Xstrata's management is upbeat, anticipating an upturn in emerging markets, and the West avoiding the worst.

Company tie-up given final green light Earlier this month, the companies received approval from China's regulator, MOFCOM, to complete their protracted tie-up that dates back to February , with the sales process required to get under way within three months from mid-April. As part of the deal, Glencore will be asked to relinquish its stake in the Las Bambas copper project in Peru -- in which Xstrata is a key player in the site's development -- before the end of September next year, subject to a minimum price.

As well, the ruling also requires the enlarged group to supply commodities-thirsty China with copper, zinc, and lead concentrate for an eight-year period, dating back to the start of , with minimum copper shipments of , tonnes per annum attached to the deal. Revenues and profit anticipated to climb According to Liberum Capital, revenues from the combined group would rise 6. The broker has pencilled in turnover growth of 6.

A reading of Dig for treasure with the Fool Like all natural resources plays, Glencore International and Xstrata come attached with a heightened risk profile. Drilling for oil and minerals mining is often a "hit and miss" business where the timing, and indeed quantities, of potential payloads are extremely unpredictable. Click here now to download our totally free report. As recent results have shown, there is strength in diversity -- and Glencore has a lot more diversity to come.

If you think Glencore is getting too big for its boots, you might find this a better growth bet. Motley Fool share analysts have found what they believe is the single best U.

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