Glencore to divest stake in Nyrstar to accelerate Xstrata takeover


Nyrstar operations

Commodities trader Glencore International has offered to relinquish its 7.8% share in zinc and lead supplier Nyrstar in a bid to accelerate its proposed takeover of diversified mining group Xstrata.

Glencore submitted the offer to divest the stake to the European Commission on 30 October, seeking to alleviate the concerns of the authorities over Glencore gaining a significant zinc market share with the takeover.

Analysts estimate a combined Glencore-Xstrata, which would be the world's largest zinc miner, would have 50% of the European zinc metal market, reports Reuters.

A decision on Glencore's offer is expected on 22 November, following a vote from Xstrata shareholders. The company may be required to offer more concessions depending on the outcome.

Boliden, Glencore, Xstrata and Nyrstar are the only companies presently producing zinc in Europe.

Xstrata owns the large San Juan de Nieva zinc refinery in Spain, with an output of 511,000mt of zinc a year. The company also owns the Nordenham zinc smelter in northern Germany.

Glencore owns the Portovesme primary lead and zinc smelter in Sardinia, Italy, which produces around 120,000t a year.

The company's partnership with Nyrstar began in 2008, which enabled business growth for the zinc producer and sale of commodity grade products at market premiums to Glencore.


Image: Glencore is set to divest its stake in zinc producer Nyrstar. Photo: Nyrstar.