Glencore Xstrata’s (LON: GLEN) Las Bambas copper project in Peru, which it must sell as part of a merger deal struck with Beijing, has attracted several bids.
The Swiss-based company said it received “numerous expressions of interest” from global mining companies and investors in the $5.2 billion project, expected to produce more than 400,000 tonnes of copper a year when it goes into production towards the end of 2014.
Speculation has centred on two Chinese firms – Chinalco Mining Corp, a subsidiary of China’s state-run aluminum group, and Hong Kong-listed MMG – who may be weighing rival bids for the three Las Bambas open pits which will also produce significant quantities of gold, silver and molybdenum as by-product.
Domain-b reports China insisted on the sale before approving the merger because the country’s regulators were concerned about the merged entity’s dominance of global copper supply – it already accounts for 7% of worldwide output:
But its market share would increase significantly over the next decade if both companies go through with their planned investments in Chile, Peru, Australia, and in the African copper belt.
Xstrata, already the world’s fourth-largest global copper producer, has projects under construction that will increase copper production by more than 50 per cent to 1.5 million tonnes per annum over the next three years.