By Alexis Flynn
LONDON-- GlencoreXstrata PLC said Sunday it agreed to sell the
mining company's Las Bambas Peruvian copper project to a Chinese
consortium in an all-cash deal worth at least $5.8 billion.
The deal, one of China's biggest mining acquisitions in recent
years, follows months of tortuous negotiations over how much the
copper project is worth. In a short statement Sunday evening,
Glencore said it had agreed to sell its entire interest in Las
Bambas to a consortium led by MMG Ltd., a unit of state-controlled
China Minmetals Corp.
The transaction is expected to close by the autumn, subject to
regulatory approval and a vote by MMG's shareholders, Glencore
said.
China Minmetals, MMG's 74% majority investor, has already
"irrevocably" backed the deal, Glencore said.
"Today's announcement demonstrates our commitment to maximizing
value for our shareholders," said Glencore Chief Executive Ivan
Glasenberg.
Glencore Xstrata agreed to sell Las Bambas to win approval from
China's Ministry of Commerce for Glencore International PLC's deal
to merge with Xstrata. That move created the world's fourth-biggest
mining company and the world's largest commodities trader.
An agreement with China's commerce ministry allowed it to
decline any offer that didn't meet Glencore's valuation, subject to
certain conditions.
Sunday's acquisition is the largest Chinese purchase of an
overseas mining asset since state-owned Aluminum Corp. of China, or
Chinalco, took a 12% stake in Anglo-Australian mining company Rio
Tinto PLC for $14 billion in 2008, according to Dealogic.
Like that purchase, this latest deal gives China greater control
of the raw materials its industries crave. The country accounts for
roughly 40% of global copper demand. Las Bambas is expected to
produce 460,000 metric tons of copper concentrate annually over the
next 10 years, according to projections by Glencore.
For Glencore, the proceeds of the deal will be reinvested in the
company, it said, and used to reduce debt.
"Our willingness to sell reflects the level of the offer and our
conviction that we can utilize the sales proceeds to create
additional shareholder value," said Mr. Glasenberg.
Corrections & Amplifications
The merger of Glencore International and Xstrata created the
world's fourth-biggest mining company and the world's largest
commodities trader. An earlier version of this article incorrectly
said the move created the world's fourth-largest commodities
trader.
Write to Alexis Flynn at alexis.flynn@wsj.com
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