Newmont eyeing Glencore Xstrata's mine in Peru
Newmont Mining (NYSE:NEM), the world’s second-largest gold producer, may be preparing a bid for the highly coveted Las Bambas copper project in Peru, which current owner Glencore Xstrata (LON:GLEN) needs to sell by end-August 2014.
When Glencore merged with Xstrata earlier this year, it agreed to sell the Las Bambas project in order to get China’s antitrust authorities approval. The regulator feared the tie-up handed the newly born commodities mammoth too much influence over copper prices.
Since then, potential buyers have been lining up, but only two Chinese mining companies, Jiangxi Copper and Hong Kong-listed MMG, have officially submitted separate bids so far.
The newest front-runner seems to be Newmont. Yesterday, the company’s Chief Executive, Gary Goldberg, told the Financial Times (pay wall) that Las Bambas is "an interesting prospect," as it is "closer to production."
"Clearly we wouldn't do that on our own. We would look at doing something with other partners," he was quoted as saying.
Goldberg, who became Newmont’s CEO in March, once ran copper operations including Rio Tinto’s (LON:RIO) Bingham Canyon mine.
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. In comparison, the U.S. miner —which last week said at the Denver Gold Forum it is open to adding more copper production— generates about 65,000 tonnes of copper a year.
The Peruvian project will also produce significant quantities of gold, silver and molybdenum as by-product.