With Glencore announcing a IPO of $12 billion I believe the Xstrata joint venture will precede. The worlds biggest commodities trader has two board members on the Xstrata board and owns 34% of the company but out of all the base metals it trades in with supply guaranteed from Xstrata it probably has the least exposure to the precious metals group compared to one of its peers in Johnson Mathey whom has a sole supply agreement with Angloplats accounting for 60% of the worlds platinum produced. In May last year China sealed the deal with its investment of $877 million in Wesizwe with Jinchaun taking all the platinum produced with a long term supply agreement. Apparently only 10 % of platinum produced is available on the open market with the rest sold as part of long term contracts and I imagine the worlds biggest commodities trader would like a bigger share of that 90% with an additional investment in Xstrata to give it the supply.
NKP Price at posting:
32.5¢ Sentiment: Buy Disclosure: Held
