A merger between Anglo American and Xstrata would create a mining powerhouse, Mining Group Xstrata CEO Mick Davis told Miningweekly on Monday. Xstrata is hoping that new Anglo American chairman Sir John Parker convinces the investors of Anglo American to accept the merger offer.

Mining analyst Liberum Capital told Miningweekly that the interim results that Xstrata posted aren't enough to convince Anglo American investors that this was in fact a merger of equals. However, Xstrata DFO Trevor Reid stated that the De Beers debt component wasn't included in the math, even though Anglo American is likely to cover the debt.

According to Davis, a merger between Anglo American and Xstrata would benefit both groups, and create a superior mining group with enhanced capabilities, as proven in the 2001 BHP-Billiton merger. A merged company would be away to develop a number of major projects without risking the company's capital, he said.