Chinalco likely to buy Glencore Xstrata's massive Peru copper mine

Chinalco Mining Corp, a subsidiary of China's state-run aluminum group, is the most likely bidder for Glencore Xstrata’s (LON: GLEN) Las Bambas copper project in Peru, in a deal that could be worth more than $5bn, reports

According to a deal struck with Beijing’s Ministry of Commerce in April, Glencore must sell the $5.2 billion Las Bambas project by the end of this month in exchange for getting the green light from China for the $74-billion merger with Xstrata.

Chinalco has already appointed Morgan Stanley and Goldman Sachs Group Inc. as advisers, says Bloomberg.

Las Bambas, made up of three open pits, is expected to produce around 400,000 tons of copper a year when it goes into production in early 2015. It will also produce significant quantities of gold, silver and molybdenum as by-product.

If Glencore does not receive a binding sale and buying agreement by the set deadline, and have a transfer of ownership by the end of June 2015, the firm has the option to sell other project instead.

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