Glencore Xstrata sells Peruvian mine Las Bambas to a Chinese consortium
Glencore Xstrata Plc sold its shareholding in Peruvian copper mine Las Bambas to a Chinese consortium after a cash deal of $ 6.000 million, one of the largest mining acquisitions made by China in recent years.
The commodities’s trader said on Sunday it sold its shareholding to a consortium led by MMG Ltd, a subsidiary of China Minmetals external Corp.
The group of natural resources and infrastructure Guoxin Investment Corp International Ltd and the investment firm Citic are the other consortium partners.
It was previously reported that Minmetals was the preferred bidder to win the Peruvian copper mine, one of the largest portfolio of projects of Xstrata.
Since Las Bambas went on sale it was considered the safest buyer would come from China, considering the huge resources that manage state enterprises of the Asian giant and hunger of that country by copper.
China, the world’s largest consumer of the metal
Las Bambas should begin production in 2015 and is expected to produce over 450,000 tons of copper per year in its first five years and thereafter 300,000 tons annually.
Glencore will receive about 5.850 million in cash at closing of the transaction. Additionally, all capital expenditures and development costs related to the mine since January 1, 2014 until the closing of the sale will also be in charge of the consortium.
Capital expenditures and other costs incurred since the beginning of the year amounted to about $ 400 million as of March 31.
The agreement is expected to close before the end of the third quarter, is subject to approval by the Ministry of Commerce of China, as well as the approval of the shareholders of MMG Ltd, which leads the consortium.
China Minmetals Corp, which owns about 74 percent of MMG Ltd, has given an irrevocable undertaking to vote in favor of the agreement.
Glencore said it would proceed to seek opportunities to reinvest capital and surplus would be returned to shareholders.
Source: Reuters
