China Consortium Buys Peru Copper Mine Stake for 585 Billion

China Consortium Buys Peru Copper Mine Stake for $5.85 Billion

BEIJING -- China Minmetals said Monday that a consortium led by one of its subsidiaries MMG has agreed to buy Glencore Xstrata Plc's stake in the Las Bambas copper mine project in Peru for $5.85 billion.

China Minmetals, a state-owned mining giant and the parent company of MMG, called it the largest overseas acquisition by China's metal mining industry. Demand for metals and other raw materials to fuel growth in China, the world's second-largest economy, has become a key influence on global commodities markets. China is the world's biggest copper importer.

The consortium is "owned 62.5% by MMG Limited, 22.5% by GUOXIN International Investment Corporation Limited and 15% by CITIC Metal Co.", Glencore Xstrata said.

"The Las Bambas project is in line with the long-term strategy of Minmetals and MMG," Minmetals President Zhou Zhongshu said. "(The acquisition) will further optimize the mining asset portfolio of Minmetals." Lenders including the China Development Bank, ICBC and Bank of China will provide funding support for the takeover.

Peru is the world's second biggest copper producer, and Las Bambas is located in the Apurimac region in the country's southeast.

The project is the world's biggest copper mine under construction, with its annual output expected to be 450,000 tons when it comes online, or 13% of China's total copper imports last year.

Highlighting China's determination to ensure supply of the metal, the Ministry of Commerce last year approved Glencore's acquisition of Xstrata on the condition that it agreed to sell the Las Bambas project, it said.

It added that those two companies combined controlled 7% of global copper supply.

Minmetals is a major producer of zinc, and also mines copper, lead, gold and silver with operations in Australia, Laos, Africa, Asia and North America.

In February 2012, Minmetals Resources Ltd., another subsidiary of the company, announced a purchase of more than 90 percent of Congolese copper miner Anvil Mining Ltd. for $1.3 billion, expanding its footprint in Africa.

In November 2013, PetroChina, the listed unit of China's biggest energy firm China National Petroleum Corp, said it would pay $2.6 billion to acquire oil and gas interests in Peru from Brazilian state-owned giant Petrobras.

Earlier this month, Chinese state-owned grain giant COFCO announced, pending regulatory and shareholder approvals, that it would take a majority stake in the agricultural commodities subsidiary of Hong Kong-based Noble Group.

COFCO had announced a deal in late February to buy 51% of Netherlands-based Nidera, a trader of grains and soybeans among other agricultural commodities and active in Brazil and Argentina.

Copyright Agence France-Presse, 2014

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