Glencore Xstrata (LON:GLEN) may allow competing bids for its massive $5.9bn Las Bambas copper project in Peru, as interest in the deposit continues to mount.
According to El Comercio (in Spanish), the company expects as many as four Chinese bidders for the first round of bids, due next week. It said there also was at least one other potential buyer for the three Las Bambas open pits, which will also produce significant quantities of gold, silver and molybdenum as by-product.
But the National Development and Reform Commission, Beijing’s main economic planning agency in charge of allowing all major overseas acquisitions, is know for restricting state-owned companies from making rival offers.
Glencore, the biggest publicly traded raw-materials supplier, must sell its Peruvian mine because of a merger deal struck with China in April last year. Under the pact, the company was given the approval to buy Xstrata only if it agreed to find a buyer for Las Bambas by Sept. 30 2014. The new owner must count with the country’s Commerce Ministry approval.
The Swiss-based company expects to secure a sale of Las Bambas by the end of this year, although closing the deal is likely to take longer.
In total, the project is expected to produce more than 400,000 tonnes of copper a year when it goes into production towards the end of 2014.