MMG in halt on possible deal with Glencore Xstrata over Las Bambas
Shares of MMG, the Hong Kong-listed offshore arm of China Minmetals Corp, were halted Tuesday after jumping 8% on fresh speculation of an imminent deal with Glencore Xstrata (LON:GLEN) on its $5.9 billion Las Bambas copper project.
The commodity trader and mining giant agreed to sell the mine last year in order to win approval from China’s Ministry of Commerce for is Glencore- Xstrata merger. However, the company doesn’t have to do it if it comes to the conclusion that there is no suitable offer.
For about three months now MMG has been signalled as the most likely next owner of the copper project, but the parties hit a snag over price, pushing talks beyond an internal March 4 deadline to reach an agreement.
If successful, the deal would be the biggest acquisition by China of an overseas mining asset since 2008, when state-owned Chinalco acquired 12% of Rio Tinto for $14 billion.
If the sale is not achieved by September 30, however, Beijing can direct Glencore Xstrata to sell one of four other copper assets.