Reuters writes that big coal buyers should not fear the merger of miner Xstrata and trader Glencore into a dominant trading force, say customers who already rely on the two for supplies of coking coal for steel and thermal for power generation.
They say the tie-up, creating the world's largest coal exporter, will only formalise the long-standing collaboration between the two and end years of ambiguity over Glencore's role in marketing Xstrata's output.
If approved by shareholders, the combined powerhouse, dubbed "Glenstrata," would control one third of the world's seaborne coal trade, excluding China's coastal shipments. But this is still below the critical threshold to completely dominate the market, traders and analysts said.
They also predicted an inevitable shift in culture at the combined entity, which will focus more on production and cost efficiency rather than on low-margin risky trading bets - thus ultimately benefiting consumers and screwing the poor. What’s not to like, right?
http://uk.reuters.com/article/2012/02/09/uk-glencore-xstrata-coal-idUKTRE8180JV20120209
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