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'Glenstrata' May Rival BHP as World's Top Miner in 5 Years: CEF

Sri Jegarajah | Reporter, CNBC Asia Pacific
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Glencore International's $31 billion takeover of Xstrata — approved by shareholders Tuesday — will create a merged company that may rival BHP Billiton as the world's top miner in five years' time, according to resources-focused private equity investor CEF Holdings.

Sebastian Derungs | AFP | Getty Images

CEO Ivan Glasenberg wants Glencore "to be the biggest miner in the world and the combined entity will give him the firepower to achieve it," Warren Gilman, Chairman and CEO of CEF Holdings told CNBC's 'The Call' on Tuesday.

"He already has the intestinal fortitude that is required," Gilman added.

The merger is the largest deal in the mining sector since Rio Tinto's acquisition of Alcan in 2007.

Glencore Xstrata, or 'Glenstrata' as it's more informally known in the industry, is likely to be "very acquisitive over the next couple of years," Gilman said, adding Anglo American, Freeport-McMoRan Copper & Gold and First Quantum Minerals may be key "growth targets" on the company's shopping list.

Gilman said those three possible acquisition targets have assets in "politically risky jurisdictions that Rio and BHP shy away" from.

That may improve the odds of Glencore winning any takeover battle for the companies or their assets though the the firm will face stiff competition from China's state-owned resources firms as Beijing scours the globe for minerals to feed the world's second-largest economy.

Shareholders in Xstrata prompted the resignation of the miner's chairman on Tuesday as they voted through the $31 billion takeover by trader Glencore but twice snubbed a controversial pay plan to retain key managers, Reuters reported.

Tuesday's complex series of votes, taking over more than two hours, brought one of the sector's biggest ever deals closer to the finish line, with only antitrust clearance remaining.

A verdict from the European Union, the toughest of the remaining hurdles, is due later this week.

Glencore has already offered concessions in its zinc operations to avoid a lengthier probe.

—By CNBC's Sri Jegarajah