Xstrata board change clears Glencore path

Marion Dakers
MINING group Xstrata has sought to put clear water between its board and commodity trader Glencore’s by choosing banking veteran Sir John Bond as its next chairman, though the miner has hinted that its long-term future is in a merger between the two firms.

Sir John will take the job in May when sitting chairman Willy Strothotte, who has also chaired Glencore since 1994, leaves the role.

Xstrata has surprised some investors by choosing a successor before Glencore, which owns a 34 per cent stake in Xstrata, publicly announces its much talked about initial public offering.

It was expected that Strothotte would then step down from Xstrata under UK corporate governance rules requiring an independent board.

Analysts at JP Morgan Cazenove said replacing Strothotte with an independent chairman clears a conflict of interest ahead of Glencore’s float.

But the move could also be viewed as a precursor to a merger between Xstrata and Glencore even if the latter decides to go public.

Xstrata chief executive Mick Davis told analysts last month it was “unsustainable in the longer term” for both Xstrata and Glencore to trade as public companies, according to an analyst note from HSBC released yesterday. There have previously been reports that Davis would chair a combined company if Glencore did move to merge, leaving both Strothotte and Bond out of the chairmanship.