Chinese miners face off over Glencore Xstrata's vast copper mine in Peru
Two of China's top mining companies, Jiangxi Copper and Hong Kong-listed MMG, have officially submitted separate bids for Glencore Xstrata’s (LON:GLEN) Las Bambas copper project in Peru.
The open battle between the two state-owned miners took analysts and investors by surprise, as Beijing usually designates a single bidder for overseas assets.
According to Asian news agency Sina, Las Bambas $5.2 billion copper project still needs an additional $5.9 billion investment to begin production.
As the world's biggest copper importer, China is looking to secure a domestic-owned source for the metal. Currently, the country only satisfies one-third of its demand.
Las Bambas' three pits are expected to produce more than 400,000 tonnes of copper per year once operations begin at the end of 2014. It will also produce significant quantities of gold, silver and molybdenum as by-product.
The only reason Glencore is selling the project is because it signed a deal with Chinese regulators earlier this year in exchange for their approval of the $76-billion merger with Xstrata.
If any of the two bids were successful, Las Bambas would become China’s largest acquisition of an overseas copper asset.