Glencore Plc extricated itself from one of the mining industry’s most value-destructive deals by offloading the Cosmos nickel mine for A$24.5 million ($19 million).
The Australian mine was bought in 2007 by Xstrata Plc, which paid A$3.1 billion for Jubilee Mines NL to gain control of the Perth-based company’s flagship operation. Glencore acquired the business when it took over Xstrata two years ago and put the mine up for sale in December along with two other nickel assets.
Glencore sold Cosmos to Australian nickel producer Western Areas Ltd., which said in a statement Friday that the mine provides it with new opportunities to explore for deposits of the metal used to make stainless steel.
Xstrata’s acquisition was struck when nickel was trading at almost $32,000 a metric ton on the London Metal Exchange. It had collapsed to $12,660 ton by Friday. The deal echoes similar industry takeovers struck at the height of a China-fueled commodities boom that are also being unwound amid a rout in prices and softening minerals demand.
Rio Tinto Group, the world’s second-biggest mining company, sold Mozambique coal assets it bought in as part of the A$3.9 billion takeover of Riversdale Mining Ltd. in 2011 for $50 million a year ago.