Chinalco to Study Bidding for Glencore’s Bambas MineZijing Wu
Aluminum Corp. of China Ltd.’s copper unit is considering bidding for a Glencore Xstrata Plc mine in Peru and is working with advisers, two people with knowledge of the matter said.
Morgan Stanley and Goldman Sachs Group Inc. are advising the unit, Chinalco Mining Corp. International, on the potential purchase of the Las Bambas copper mine, the people said, asking not to be identified because the plans are confidential.
Glencore agreed to sell the Peruvian copper project to secure Chinese regulatory approval for its $29 billion takeover of Xstrata Plc, which it completed three months ago. BMO Capital Markets valued the asset at $6.5 billion in April, while Liberum Capital Ltd. has estimated its worth at $4.4 billion.
Du Qiang, board secretary of Chinalco Mining, declined to comment when contacted by phone in Hong Kong. Morgan Stanley, Goldman Sachs and Glencore also declined to comment.
The Las Bambas mine is scheduled to produce 400,000 metric tons of copper a year starting in 2015 for at least the first five years. Xstrata said in January it was building the mine at a cost of $5.2 billion.
The agreement with China requires Glencore to pursue the sale of Las Bambas to a buyer approved by the country’s Commerce Ministry by Sept. 30 next year. The sale price will be the higher of two scenarios -- either an evaluation by two independent investment banks, or the total of all costs incurred by Glencore and Xstrata at the project, according to Glencore.
A deal may be valued at about $5 billion, the Wall Street Journal reported yesterday, citing unidentified people with knowledge of the matter.