UK-listed mining company Xstrata, which is in "ongoing dialogue" regarding a potential merger, is facing a conundrum over who to appoint as financial adviser, with 13 banks already working for rivals in a battle that has involved the firing of at least one bank following concerns over conflicts of interest.

Xstrata said in a statement today that it is in "ongoing interaction" with potential suitors but the company is not thought to have appointed formal advisers because discussions are "very preliminary".