One day we may be in their sites?

 http://money.aol.ca/article/xstrata-1st-writethru-bgt/101604/

Xstrata, one of world's largest miners, in preliminary takeover talks

Source: The Canadian Press

Posted: 02/15/08 10:27PM

Filed Under: Business News

ZUG, Switzerland - Xstrata PLC, one of the world's largest miners and owner of Canada's former iconic nickel producer Falconbridge, says it's in talks with various parties about possible takeovers but no firm proposals have emerged.

"Xstrata confirms that its ongoing interaction with other industry participants includes dialogue with a number of parties covering a range of topics of mutual interest, such as industry consolidation," the company said Wednesday.

"Xstrata is continually reviewing opportunities within the industry with a view to adding value to its shareholders. "None of these very preliminary discussions have resulted in any proposal being made."

Shares in Xstrata (LSE:XTA) dipped 0.9 per cent to 3,705 pence or US$75.80 on the London Stock Exchange.

The mining industry has been consolidating in the last few years as companies get bigger to take advantage of high prices for copper, zinc, aluminum, iron ore and other metals used in industry, especially in the fast-growing economies of China and India.

In Canada, a global hub of mining and mine financing on the stock markets, major metals producers Inco Ltd. and Falconbridge Ltd. were acquired by foreign companies in the last two years. Meanwhile, steelmakers Stelco, Dofasco, Ipsco and Algoma Steel are now all in foreign hands.

Xstrata recently received approval from South Africa's High Court to proceed with a US$1-billion takeover of Eland Platinum Holdings Ltd., while BHP Billiton Ltd. (NYSE:BHP), the world's biggest miner, made a bid for Rio Tinto Group (LSE:RIO) in November.

Xstrata shares have risen nearly a third since that offer was announced, although Rio Tinto has roundly rejected BHP Billiton's proposal - valued at around US$130 billion or 88.33 billion euros.

Xstrata's statement Wednesday came a day after the Financial Times of London reported a possible takeover, naming Brazil's Companhia Vale do Rio Doce and Anglo American PLC of South Africa (LSE:AAL) as possible suitors.

Companhia Vale, or CVRD, acquired Toronto-based nickel giant Inco last year and has renamed the company Vale Inco Ltd. The Toronto nickel miner has 12,000 employees and major operations in Sudbury, Ont., and Thompson, Man.

Xstrata completed its acquisition of Falconbridge about a year ago, acquiring nickel, copper mining, smelting and other operations around the world.

In an investor conference last week, Xstrata said it expects to grow its copper, coal and nickel operations around the world. Moreover, CEO Mick Davis speculated that BHP's move to acquire Rio would likely lead to more mergers and consolidation in the mining industry.

"I think we are the most perfectly positioned company in the industry, the company which is going to benefit from consolidation in any way that it actually transpires," he told investors. "