By Alex MacDonald
LONDON--At least three to four consortia of Chinese companies
are set to make their first indicative offers for Glencore
Xstrata's PLC (GLEN.LN, GLNCY, 0805.HK) Peruvian Las Bambas copper
project next week, the commodity company's senior executives said
Tuesday.
Glencore had agreed to sell Las Bambas as a condition to secure
Chinese regulatory approval for its $44.6 billon purchase of
Xstrata, which closed in May. Whoever buys Las Bambas will have to
secure approval from China's Ministry of Commerce. The conditions
were imposed even though Glencore doesn't operate any copper-mining
or processing facilities in China.
Glencore Xstrata's Chief Financial Officer Steven Kalmin told
reporters on Tuesday the FTSE-100 miner expects to sign a sale
agreement on the project by the end of the year and added that
first indicative bids could come next week.
Glencore Xstrata's CEO Ivan Glasenberg said there has been
robust interest in the sale process from Chinese companies that
have formed at least three to four separate consortia in order to
bid on the project. He also said other non-Chinese companies have
expressed interest in the project, although he wasn't able to say
whether non-Chinese companies would be able to secure a necessary
approval from China's antitrust authorities to successfully win the
tender process.
The Baar, Switzerland-based miner said Tuesday it has revised
the development cost for the Las Bambas project by $740 million to
$5.9 billion, $2.7 billion of which will be spent in 2014 and 2015
alone. Glencore Xstrata expects to sign a sale deal on the project
by the end of the year and complete the sale by 2015. It has
already reduced its forecast 2014 and 2015 capital expenditure
budget by $2.7 billion to reflect the sale.
State-backed Chinese miners Chinalco Mining Corp. International
(3668.HK), MMG Ltd. (1208.HK). and Jiangxi Copper Co. Ltd.
(0358.HK), are considering bidding for Glencore Xstrata PLC's Las
Bambas copper mine in Peru, in a transaction that could be worth $5
billion, bankers with knowledge of the deal said.
-Yvonne Lee and Prudence Ho contributed to this story.
Write to Alex MacDonald at alex.macdonald@wsj.com
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