XStrata rejects Vale takeover bid

The Anglo-Swiss owned XStrata is the majority shareholder of Sagittarius Mines, Inc. (SMI), a copper and gold project located in South Cotabato. Late in January, SMI sources confirmed receiving advisory from XStrata Copper, a subsidiary of XStrata Plc, that takeover talks were indeed in the offing.

"The two sides are nowhere near to an agreement," the report said and added that the Brazilian group was "close to walking away from the whole thing.”

Last month, XStrata Plc confirmed it is in talks with Vale for possible takeover or merger. Sources said the takeover could top $80 billion.

XStrata is said to be going for $45 per share and rejected the $76-billion bid of Vale.

A merger between Xstrata and Vale would have created the world's biggest mining company.

Late last year, XStrata announced its exploration studies in the Tampakan Copper and Gold Project could yield as much 2.2 billion tons in ore deposits, up 10 percent from the last estimate declared in April 2006.

The upgraded measured, indicated and inferred resources were pegged at a grade of 0.6 percent copper and 0.2 grams per ton gold and contains 12.8 million tons of copper and 15.2 million ounces of gold using a 0.3 percent copper cut-off grade, XStrata said in a statement.

Reports of takeover talks between Vale and XStrata came just weeks after heavily armed members of the communist-led New People's Army staged a New Year's Day attack at its base camp in the remote village of Tablu in Tampakan, South Cotabato.

No one was hurt during the attack but some P12-million worth of company buildings were burned down by the NPA rebels. (Edwin G. Espejo / MindaNews contributor)