April 14 (Reuters): A Chinese consortium bought the Las Bambas copper mine in Peru from Glencore Xstrata for $6 billion, the high end of analysts’ forecasts in China’s biggest acquisition of a mine, showing the strength of its long-term need for copper.
MMG Ltd, the Hong Kong-listed offshore arm of China’s state-owned Minmetals Corp, led the winning bid in partnership with Hong Kong-registered Guoxin International Investment Corp and state-owned investment giant CITIC Group.
Commodity trader Glencore had agreed to sell Las Bambas to secure approval from China’s competition authorities for its takeover of miner Xstrata.
Beijing made this condition to prevent the merged group from having potentially too much power over the global 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 its hunger for copper as the world’s top consumer of the metal.
Glencore will receive about $5.85 billion in cash upon completion of the deal, which compared with analysts’ forecasts between $5 billion and $6 billion. The Chinese group will also pay the mine’s capital expenditure and development costs from the beginning of 2014 until the deal closes, which amounted to about $400 million as of March 31.