The WSJ reports,"GlencoreXtrataPLC 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.
