Pay deals put Glencore-Xstrata merger at risk

Bosses of mining giant Xstrata were warned that their $90 billion mega-merger with commodities trader Glencore was at risk because shareholders were incensed by the $380 million payouts they would be due under the deal, according to the Australian Financial Review.

Standard Life Investment, which owns 2% of Xstrata, said the Glencore deal should be opposed and Fidelity, which owns 1.1%, warned that the proposed deal was “at risk”

Xstrata shareholders will meet chairman Sir John Bond to discuss why retention packages for 73 management positions should be $273 million. Xstrata chief executive Mick Davis, who will take the same role in the enlarged company, stands to receive nearly $46 million in a three-year retention plan plus shares.

“The terms of the pay arrangements associated with the merger of Glencore and Xstrata are provocative and insensitive given the current climate,” Fidelity global chief investment officer Dominic Rossi said.

Carbon tax fears cool down

Opposition to the federal government’s carbon tax remains at near record levels overall but there are signs that Labor’s aggressive marketing campaign for its compensation package could be starting to resonate with voters, according to the Australian Financial Review.

Figures released in a Nielsen poll show a steady increase in the number of voters who believe that introduction of the carbon price, including any associated compensation, will not make a difference to their financial position.

Nielsen pollster John Stirton said while there was no statistically significant change in the figures yet, the poll showed the beginning of a trend for a fall in the proportion of people who believed they would be worse off and a rise in the number who believed they would not be personally affected.

Skills shortage in mining sector to worsen

Job vacancies in the resources industry are set to soar as the task of completing a record $260 billion of new projects and expansions across the country moves into top gear, according to The Australian.

The Australian Mines and Metals Association estimates job vacancies in mining, and oil and gas, are running at 6000 positions and could surge to 40,000 vacancies within the next year as 96 resource and energy projects get built or undergo expansions.

Migrant mine workers a 'short-term solution'

Employing migrant workers to develop Australia's resources projects is a short-term solution to address the skills shortage issue according to PricewaterhouseCoopers partner Matt Guthridge, The Australian reports.

But a change in industry attitudes, including towards female workers, is needed to fundamentally change the critical situation, according to Guthridge, who has spent the past six months talking to key resources executives about the skills shortage.

He said that while the new controversial enterprise migration agreements made things easier in the short term, the real challenge was around changing attitudes not only in the sector, but also about the sector.

"The skills shortage has real consequences for the productivity of the industry and the nation … there are real consequences for not getting this right," he said.

"We need solutions that solve the shortages in the long term and move beyond the short-term thinking that dominates the issues to date."