Chinese Companies Buying GlencoreXstrata Peruvian Mine for $5.85 Billion

Last year, Chinese mining and energy acquisitions abroad totaled $29.8 billion.

Associated Press
Associated Press
Apr 14, 2014 at 10:21AM
Energy, Materials, and Utilities

BEIJING (AP) -- A group of Chinese state-owned companies is buying a Peruvian copper mine from Glencore Xstrata Plc for $5.85 billion, adding to a wave of Chinese resource acquisitions abroad.

Glencore, based in Switzerland, said Sunday it signed an agreement to sell its entire interest in the Las Bambas copper mine to a consortium led by MMG Ltd., a mining company controlled by state-owned China Minmetals Nonferrous Metals Co. Ltd. The other buyers are Guoxin International Investment Corp. and Citic Metal Co., also state-controlled.

The purchase adds to a multibillion-dollar string of foreign acquisitions by China's government-owned energy and mining companies, which hope to profit from future demand.

The agreement also requires the buyers to reimburse Glencore for the cost of developing the copper mine from the start of the year until the sale closes. In the first three months of the year, those costs were roughly $400 million, according to Glencore's statement.

Glencore said it expects to close the sale before the end of September. It still needs MMG's shareholders and China's Ministry of Commerce to approve the deal.

Last year, Chinese mining and energy acquisitions abroad totaled $29.8 billion, according to Dealogic, a financial information firm. They included China National Petroleum Corp.'s $4.2 billion purchase of an interest in an oilfield in Mozambique from Italy's ENI.