MANILA, Philippines – Commodities giant Glencore Xstrata Plc has finally sold its interest in Las Bambas mine in Peru, clearing the way for the company to determine the direction of its other copper assets such as the troubled Tampakan copper-gold project in Mindanao.
Glencore has sold its entire interest in the Peruvian copper mine for $5.85 billion to a Chinese consortium composed of MMG Limited, Guoxin International Investment Corp. Limited and Citic Metal Co., Ltd.
Glencore sold Las Bambas to secure the approval of Chinese anti-trust authorities for its merger with Anglo-Swiss miner Xstrata as copper-hungry China feared the merged entity would have considerable control over the world copper supply.
The sale, which is expected to close in the third quarter of 2014, is still subject to the approval of state regulators as well as the shareholders of MMG Limited.
Prior to the sale, Glencore has expressed interest in divesting its majority interest in the $5.9 billion Tampakan project consistent with its preference not to develop greenfield projects.
The Tampakan project was initially included in the list of other copper assets projects that may be disposed of in the event that the Las Bambas mine is not sold.
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Glencore’s minority partner in the project, Indophil Resourses NL, has expressed interest in acquiring full ownership of Sagittarius Mines Inc. (SMI), the operator of the prospective mine.
Glencore holds a 62.5 percent interest in the the project operator Sagittarius Mines Inc. (SMI) while Indophil holds a 37.5 percent stake.
Indophil, in turn, is currently 30 percent owned by Filipino corporations. These include the Alsons group through funding by BDO Unibank, the SM group, San Miguel Corporation and Philex Mining Corporation.
Indophil Vice President for Corporate Affairs Gavan Collery earlier said that Indophil is in an advantageous position to buy Glencore’s stake in the project should this arrangement materialize because they have the right of first refusal in the possible stake sale.
He said discussions for the possible acquisition of Glencore’s stake would be discussed after the completion of the sale of the Las Bambas mine.
“The Las Bambas outcome has been a long time in the making and is important for Glencore as it fulfills the conditions set by China and once completed, clears way for Glencore to deal with other greenfield copper assets including its share in Tampakan,” Collery said in a text message yesterday.
