According to an article published on the Wall Street Journal,
"Glencore Xtrata PLC is selling its majority stake in one of the Asia-Pacific's biggest unmined copper deposits, the latest in a flurry of asset sales across the mining industry that suggests deal making may be picking up as some commodities rebound.
Australian copper-and-gold minerPanAust Ltd. said Friday it would buy the Frieda River deposit in Papua New Guinea from Glencore for as much as US$125 .
A series of assets sales in recent months has followed a notable weak deal making period over the past year as miners struggled with falling commodity prices and rising costs".
"Glencore Xtrata PLC is selling its majority stake in one of the Asia-Pacific's biggest unmined copper deposits, the latest in a flurry of asset sales across the mining industry that suggests deal making may be picking up as some commodities rebound.
Australian copper-and-gold minerPanAust Ltd. said Friday it would buy the Frieda River deposit in Papua New Guinea from Glencore for as much as US$125 .
A series of assets sales in recent months has followed a notable weak deal making period over the past year as miners struggled with falling commodity prices and rising costs".
"Last week, Glencore and Japan's Sumitomo Corp.agreed to buy Rio Tinto PLC's stake in the Clermont coal mine in eastern Australia for around US$1 billion.
South African miner Gold Fields Ltd. recently agreed to buy three mines in Australia from Canadian peer Barrik Gold Corp. for about US$300 million, while Rio Tintoagreed to sell its controlling stake in the Northparkes copper-and-gold mine in Australia to a Chinese company for US$820 million".
"According to a midyear report by Ernst & Young, there were only 350 merger-and-acquisition deals across the global mining sector in the first half of 2013, down 30% on-year.
Since then, the value of many commodities, like iron ore and copper,have rebounded as Chinese imports climbed and fears of a sharp slowdown in the world's No. 2 economy abated. Copper is up 10% since its year-to-date low in June. Gold is about 7% higher.
PanAust said it would take an 80% interest in the Frieda River project. The remaining 20% is controlled by joint-venture partner Highlands Pacific Ltd. PanAust has also agreed to take a 7.5% stake in Highlands for A$5 million (US$4.7 million). The Wall Street Journal reported in August that the company was in talks with Glencore to purchase its stake.
PanAust is no stranger to operating mines in impoverished Southeast Asian nations lacking infrastructure and skilled workers. It has two active pits in Laos that produce copper and gold, and the Brisbane-based company accounts for about 30% of that country's exports.
"From a strategic point of view, Frieda River provides us with the basis for growing production beyond our current mine life in Laos," PanAust Managing Director Gary Stafford said in an interview. "It gives us another string to our bow."
Glencore inherited the Frieda River project through its multibillion-dollar takeover of Xstrata PLC earlier this year, but has signaled a preference for owning active mines that produce commodities it can sell through its trading arm. It has been reviewing its assets since its acquisition of Xstrata".
