September’s top stories: Glencore-Xstrata merger and China’s mining accidents

1 October 2012 (Last Updated October 1st, 2012 18:30)

While China witnessed two mining disasters, India ordered the closure of six coal mines and commodities trader Glencore improved its bid to takeover Xstrata. Mining-technology.com wraps up the key headlines from September 2012.

September’s top stories: Glencore-Xstrata merger and China’s mining accidents

Chinese coal mine blast leaves 43 dead, three still missing

China

A gas explosion at the Xiaojiawan coal mine in the Sichuan province of China killed 45 miners.

There were 154 workers in the coal mine at the time of the incident, which occurred on Wednesday 29 August, and 108 of them were rescued.

On 1 September, state media said 43 miners had been killed in the disaster, but two more bodies were later found under the rubble. One worker was still missing as of September 2.

India orders closure of six coal mines

India

Authorities in the East Indian state of Odisha halted production at six of Coal India's mines following the expiry of the requisite environmental clearances.

Operations came to a standstill on 2 September 2012 at the company's Lajkura open cast mine and the Orient group of mines at the Ib Valley Coalfield in the Jharsuguda district.

Odisha director of mines Deepak Mohanty told Reuters that operations will not resume unless the company obtains approval to do so.

Glencore delays vote on Xstrata takeover bid

Glencore

Glencore delayed a shareholder vote on the $34bn takeover bid of miner Xstrata, citing last-minute "developments".

The firm opened and immediately adjourned the meeting on 7 September due to overnight talks, sparking speculation among markets that it may have improved the deal.

Hours before the meeting, the takeover deal look set to collapse, as Xstrata's largest shareholder Qatar Holdings (QH) said it would vote against Glencore's offer of 2.8 new shares for every Xstrata share held.

Glencore improves takeover bid, Xstrata to respond by 24 September

"The company's earlier takeover bid rose to $36bn, equating to 3.05 shares for each existing Xstrata share."

Just as markets predicted, Glencore improved its offering to Xstrata on 10 September.

The company's earlier takeover bid rose to $36bn, equating to 3.05 shares for each existing Xstrata share.

In a statement, Xstrata said that a decision on the improved offer will be taken by its independent directors before 0600GMT on 24 September.

But it wasn't until 1 October that the miner finally recommended the deal to its shareholders.

South African miners seek higher pay against ongoing strike

Striking South African miners threatened to bring the country's platinum belt to a standstill if they don't see an increase in pay.

"President Jacob Zuma has said he strongly opposes the violent strikes."

On 17 September, more than 54,000 platinum miners had downed tools as part of an ongoing strike, which started as an industrial dispute at Lonmin's Marikana mine and led to the shooting of 34 miners by the police.

Meanwhile, President Jacob Zuma has said he strongly opposes the violent strikes, adding that the situation will adversely affect both the miners and the country.

Rio Tinto to cut workforce at Australian coal mines

Rio

Global mining major Rio Tinto said it is in discussions to lay off part of its workforce at its mines across Australia due to a decline in coal prices.

Australia, the world's second largest exporter of thermal coal used for power generation, has seen its coal prices fall by more than 20% to less than $90 a metric ton (1.1023 tons) as demand for the material slows in China.

A high Australian dollar and a bleak outlook for the growth of the mining industry have forced Rio to cut jobs to push costs down, while other global miners such as Xstrata have also resorted to similar measures recently.

Coal mine accident in north-west China kills 20

Deaths

China saw its second mining disaster in one month when a steel cable pulling a two-carriage cable car broke, overturning the cars and plunging the occupants into the pit of the Qusheng-owned coal mine in Baiyin, Gansu province.

Twenty miners were killed in the accident, which occurred on 25 September, and 14 others were injured.

China has the world's deadliest coal mine industry, with 1,973 miners killed in accidents last year.

Lundin Mining opts out of Touro copper project acquisition

"Canada-based Lundin Mining scrapped plans to purchase a controlling stake in the Touro copper project."

Canada-based Lundin Mining scrapped plans to purchase a controlling stake in the Touro copper project in northern Spain.

Under an agreement signed with private investors in April 2012, the company had the option to purchase an 80% interest in the project before 1 October 2012 for an estimated price of €60m.

A detailed due diligence programme, however, showed that the project in the La Coruna province would not provide sufficient economic returns to meet the company's investment criteria, Lundin said in a statement.