Chinese miners eye Glencore Xstrata copper mine in Peru
Two companies linked to Chinese state-backed groups are reportedly considering offers for Glencore Xstrata’s (LON: GLEN) Las Bambas copper project in Peru, which the merged company must sell by the end of August 2014 as part of a deal struck with Beijing’s Ministry of Commerce in April.
According to an unnamed inside source quoted by Reuters, “the impression in the market is that s that China would love for this to end up in Chinese hands.”
The two firms weighing rival bids for the $5.2 billion Las Bambas project, expected to produce around 400,000 tons of copper a year, are said to be Chinalco Mining Corp International, a subsidiary of China’s state-run aluminum group, and Hong Kong-listed MMG Ltd.
The transaction is also expected to attract interest from Indian bidders, although many view that Chinese companies would eventually own the project.
The only reason Glencore is selling Xstrata’s Peruvian project is because it signed a deal with the Chinese regulators for approving its $76-billion merger with mining giant Xstrata.
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 sites.
Image: People holding Chinese and Peruvian flags watch a dragon dance performance outside the government palace in Lima.