Bloomberg: Minmetals Close To $5 Bln Deal To Buy Glencore's Bambas Mine
(RTTNews.com) - Glencore International Plc.'s (GLCNF.PK, GLNCY.PK, GLEN.L) Las Bambas copper project in Peru may be bought by a Chinese group led by China Minmetals Corp. for over $5 billion, Bloomberg reported, citing people with knowledge of the matter.
The group includes Citic Metal Co., a unit of Citic Group Corp., and China Reform Holding Corp., an investment company backed by China's state assets regulator.
A deal may be announced as early as this month. Minmetals is China's biggest state-owned metals trader. One of the people told Bloomberg that the asset could fetch closer to $6 billion.
The sale of the Las Bambas mine is as part of Glencore's agreement with China, the world's biggest copper consumer, to win regulatory authorization for its $29 billion takeover of Xstrata last year.
Chinese companies are trying to take advantage of lower commodity price declines to buy assets overseas.
Previously, a consortium led by Aluminum Corp. of China had evinced interest in the mine, but abandoned the offer in November 2013. Thus, the Minmetals group became the sole Chinese bidder left.
Chinalco decided to withdraw after it rejected a proposal by the government to be a minority partner in a combined bid led by Minmetals.
After taking over Xstrata, Glencore became the world's fourth-largest mining company. The sale became necessary as China asked the miner to do so in order to limit its power over the global copper market.
A deal valued at $5 billion would be second-biggest mining-related acquisition by a Chinese buyer. In 2008, Chinalco bought a stake in Rio Tinto, in partnership with Alcoa Inc., for $12 billion.
BMO Capital Markets Ltd. and Credit Suisse Group AG are advising Glencore on the sale.
Bank of America Corp., Citigroup Inc. and Deutsche Bank AG are advising the Minmetals-led group.
GLEN.L is up 1.2 percent in early morning trade at 326.20 pence.
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