Glencore to divest its Lonmin stake
JOHANNESBURG (miningweekly.com) – Johannesburg- and London-listed Glencore on Wednesday announced its intention of divesting its noncore 23.9% stake in JSE-listed Lonmin during the first half of this year.
The stake, which was inherited through the acquisition of Xstrata in 2013, would be disposed by way of a distribution in specie to Glencore shareholders.
“Glencore’s investment philosophy is to hold investments in production assets in the commodities in which we trade and so we have always regarded the stake in Lonmin as noncore.
“As we do not trade platinum and have no special insight into the market, we believe that it is better to leave to our shareholders the decision as to how to manage the Lonmin shares,” Glencore CEO Ivan Glasenberg explained.
The group, which believed a straightforward market disposal of the stake would not be in the best interests of Glencore shareholders, would seek shareholder approval at its annual general meeting on May 7.
Following this, Glencore’s two nominated representatives on the Lonmin board, Gary Nagle and Paul Smith, would step down.
In a responding statement, Lonmin said Glencore’s approach was constructive and would allow Glencore shareholders to continue their participation in Lonmin’s future, which showed promise.
During the first quarter of the year, Lonmin achieved the highest production from its underground operations since 2011, with output of 200 170 platinum ounces – an 11.4% rise on the comparative period the year before.
Sales of 146 890 platinum ounces increased by 9%, or 12 086 oz, on the prior year period.
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