* Sold to a consortium of bidders led by HK-listed MMG Ltd
* Deal for $5.85 bln in cash
* Glencore says proceeds will materially de-leverage balance
By Karen Rebelo
April 13 Glencore Xstrata has sold its
interest in the Las Bambas copper mine in Peru to a Chinese
consortium in a $6 billion cash deal, making it one of China's
largest mining acquisitions in recent years.
The commodities trader said on Sunday it had sold its
interest to a consortium led by Hong Kong-listed MMG Ltd
, the offshore arm of China Minmetals Corp.
Hong Kong-based Guoxin International Investment Corp Ltd and
China's Citic Metal Co Ltd are the other partners in the
Minmetals had been reported to be the preferred bidder for
the Peruvian copper mine.
Glencore agreed to sell Las Bambas to secure approval from
China's competition authorities for its takeover of Anglo-Swiss
miner Xstrata as Beijing feared the merged group would have too
much power over the copper market.
A Chinese buyer had been considered a virtual certainty
since Las Bambas was put on the block, given the deep pockets of
China's state-owned enterprises and China's hunger for copper -
it is already the world's top consumer of the metal.
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.
Glencore will receive about $5.85 billion in cash upon
completion of the deal. In addition, all capital expenditure and
development costs since the beginning of the year until the
closure of the deal will also be payable by the consortium.
Capital expenditure and other costs incurred since the start
of the year were about $400 million as of March 31.
Glencore said proceeds from the sale will "immediately and
materially" deleverage its balance sheet.
The deal, 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.
China Minmetals Non-Ferrous Metals Co Ltd, which holds about
74 percent of MMG, has agreed to vote in favour of the deal,
Glencore said it would continue to look for opportunities to
reinvest capital and any surplus capital would be returned to
BMO Capital Markets and Credit Suisse advised Glencore on
(Reporting by Karen Rebelo in Bangalore; Editing by Tom
Heneghan and Kevin Liffey)