RE:RE:RE:RE:RE:RE:RE:ZINC TC and ZINC PriceIt is compicated. but technically directors are paid by the fund, not Gland agreementsencore. There are 7 seats on the board. NIF has a bunch (at least 6) of interwoven contracts and agreements with Gencore to operate the plant, supply the staff, suppliy the feed, purchase 100% of the metal, etc. Glencore is NIF's biggest supplier (sells NIF 100% of the feed) biggest customer (buys 100% of the metal) and the largest shareholder (25%). As part of these agreements Glencore is entitled to 3 of 7 board seats. The other 4 board seats are "Independent" and are supposed to represent the other 75% of the shareholders (me and you). The independent board members were elected about 10 years ago after a "shareholder uprising" led to the resignation of the 4 board members and appointment of the current guys.
My opinion is that the current independent board are not acting in our (the shareholders) best interests, but we are only one of the stakeholders. I am pretty sure that the other stakeholders (the workers, the Quebec government, the suppliers, customers, the community of Valleyfield, etc.) would say that they are acting in their best interests by keeping the plant running in hopes of higher TCs and profitable operation down the road.
The biggest problem is the lack of transparency. We do not know the TC, and we do not know the methods and/or how hard NIF negotiated to get a higher TC. We only know that the deal that was finally struck allows NIF to break even (kind of, sort of). There are so many questions:
- Was there a better deal to be had
- Did the board threaten to shut it down
- Did Glencore threaten to shut down and supply the metal from offshore
- Do the 5 year agreements they have signed even permit shutting down
- etc
We will never know because all of this is kept secret from the 75% (you and me). Short of a large independent shareholder demanding a special meeting or a proxy fight for our votes to oust the board, or gaining a seat, we are stuck having to to rely on the independent board to carry out their fiduciary duties. Like iwasgold, I am frustrated with the board and feel there has been questionable (if not illegal) activity but how do we get some action initiated???
Proxy fights and legal battles are long and expensive. Glencore is known to skate close to and sometimes over the line, but thinking/knowing this and legally compelling them to "play fair" will be a difficult/expensive battle.
BB