Glencore Xstrata Plc sold its copper mine project "Las Bambas", located in Peru's central region of Moquegua, to a Chinese consortium in a US$ 5.85 billion cash deal.
The Switzerland-based company said Sunday it signed an agreement to sell its entire interest in the Las Bambas copper mine to a Chinese consortium led by MMG Limited, a mining company.
The biggest shareholder of the said company is backed by the Chinese government, while the other members of the group are Guoxin International Investment Corp. and Citic Metal Co.
According to Glencore's statement, all capital expenditure and other costs incurred in developing Las Bambas in the period from 1 January 2014 to closing will also be payable by the Consortium.
At the end of March 2014, capital expenditure and other costs incurred since the start of the year amounted to approximately US$400 million.
The transaction, which is expected to close prior to the end of the third quarter, is subject to approval from China's Ministry of Commerce (MOFCOM) as well as approval from MMG's shareholders. BMO Capital Markets and Credit Suisse advised Glencore on the sale.
Las Bambas, one of the largest mines in Xstrata's project portfolio, is due to begin production in 2015. It is expected to produce more than 450,000 tonnes of copper a year in its first five years and 300,000 tonnes a year thereafter.
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Published: 4/13/2014