Glencore Xstrata to put Peruvian copper mine up for sale
Glencore Xstrata began the process of unloading its Las Bambas copper mine in Peru with the appointment of two investment banks to advise on the sale, The Financial Times reported.
The company confirmed that it had hired BMO Capital Markets and Credit Suisse to work on the $4 - $5-billion transaction, and said that it had been approached by various rivals and other parties interested in purchasing the asset.
Chinese competition regulators required the Glencore Xstrata to sell the mine as a condition of them clearing the $64 billion merger of Glencore and Xstrata, completed earlier this year.
Chinese merger approval had been the final big hurdle that the two companies needed to clear in order to push through their alliance.
Glencore Xstrata has until Sept. 30, 2014 to strike a deal to sell the Las Bambas project to a buyer approved by the Chinese ministry of commerce.
Reuters reported in June that two companies linked to Chinese state-backed groups – Chinalco Mining Corp International and MMG – were considering making bids for Las Bambas.
The mine is situated about 70 km southwest of Cusco. It is at an advanced stage of construction and is due to start production in 2015.
Mining companies around the world are looking to sell non-core assets amid softening prices for key commodities and slowing growth in China.
Such disposals are not always straightforward, however. Last month Rio Tinto had to abandon plans to sell or float its precious gems business.
Glencore also announced that its Ernest Henry Mining arm was suspending production of magnetite iron ore in Australia, citing weak market conditions.