Glencore quits Lonmin
Commodities trader and mining behemoth Glencore is to offload its stake in under-pressure platinum miner Lonmin to cut costs to cope with the commodity price slump.
On Wednesday Glencore revealed details of the share sell-off and an 18pc spending cut in its budget to around £4.25bn in a bid to deal with the ‘volatile market backdrop’.
Glencore (up 0.65p to 271.7p) will distribute its near 24pc stake in the struggling platinum miner in shares to Glencore’s investors. The distribution is worth around 3 cents per Glencore share. Shareholders will be free to sell or hold the shares once the deal is completed.
Lonmin shares fell more than 8pc or 14.3p to 158.1p on the news as investors feared it will lead to Glencore shareholders selling out.
Glencore chief executive Ivan Glasenberg said: ‘As we do not trade platinum and have no special insight into the market, we believe it is better to leave to our shareholders the decision as to how to manage the Lonmin shares.’
Glencore, which bought the stake via its mega-merger with Xstrata in 2013, also issued a production update and said annual copper production rose 4pc, zinc was flat and coal output rose 6pc.
– Daily Mail