MMG confirms negotiations with Glencore over Las Bambas; no guarantee of agreement

Glencore Xstrata CEO Ivan Glasenberg

Australia-based MMG, the offshore arm of China Minmetals Corp, confirmed on Wednesday that it is negotiating with Glencore Xstrata (LON:GLEN) over the acquisition of the Las Bambas copper project in Peru.

This is the first statement in which MMG has confirmed its intention to buy Las Bambas.

Several media outlets speculated on the matter over the past few days and MMG halted trading on the Hong Kong exchange on Tuesday.

MMG also noted that the two parties have not yet struck a deal and cautioned that “there is no assurance” that an agreement will be reached.

The company is bidding for the project through a consortium with GUOXIN International Investment Corporation, a financial investment company registered in Hong Kong, and CITIC Metal, a subsidiary of state-owned investment firm CITIC Group.

Glencore must sell Las Bambas by September in order to satisfy Chinese regulator demands. When the firm acquired Xstrata in May 2013, China’s Ministry of Commerce insisted that it sell the $5.2 billion project over fears that the new mining giant would dominate global copper supply.

Las Bambas is now in full construction phase and is set to produce 400,000 tonnes of copper per year starting in 2015.

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