Minmetals to buy Peruvian copper mine
May 8, 2014 Category Automotive Metals & Minerals, Metals
A group backed by China Minmetals Corp will buy Glencore Xstrata’s key Peruvian copper mine for USD5.85 billion, in one of China’s largest overseas mining acquisitions. China would gain control of one of the world’s largest copper projects being built while allowing Glencore to cut debt. Glencore last year agreed to sell the Las Bambas project in return for its takeover of Xstrata to be approved by China’s authorities. “The acquisition of Las Bambas is an important milestone for outbound Chinese investment in the global resources industry,” Minmetals President Zhou Zhongshu said, adding that it will improve the company’s mining portfolio and produce synergies with existing businesses. Melbourne-based MMG, the overseas unit of state-owned Minmetals, holds a 62.5% stake in the consortium buying Las Bambas while Guoxin International Investment Corp has 22.5% and CITIC Metal Co owns 15%. Las Bambas could produce over 2 million tons of copper concentrate in its first five years of operation, MMG said. The deal could propel MMG ahead of Jiangxi Copper Co as the biggest listed copper miner by volume in Asia, Barclays said. The transaction, set to close by the autumn, is subject to regulatory approvals in China and Peru and a vote by MMG shareholders. The acquisition increases MMG’s copper resources by 2.7 times to 10.5 million tons and turns the firm into Asia’s largest miner of the metal and into the big league of the top 15 copper mining companies. Barclays’ analysts estimated the acquisition could result in an up to 300% increase in potential profit for MMG from 2016.
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