Photo by: Bloomberg
TORONTO (miningweekly.com) – Global diversified miner Glencore on Tuesday reported that all conditions to complete the $5.85-billion cash sale of its Las Bambas copper project, in Peru, to a consortium of investors had been met, adding that it now expected to close the deal early next month.
London-, Hong Kong- and Johannesburg-listed Glencore said in April that it had agreed to sell its entire interest in Las Bambas to a consortium owned 62.5% by the Hong Kong-listed MMG, 22.5% by Guoxin International Investment Corporation and 15% by Citic Metal Company.
Analysts had hailed the transaction as coming in at the high end of the expected price range, taking significant pressure off the miner’s balance sheet.
Under the terms of the deal, the consortium would be responsible for all capital expenditure (capex) and costs incurred in developing Las Bambas between January this year and the closing of the offer. At the end of March, since the beginning of the year, the project had incurred capex of about $400-million.
The Las Bambas project is one of the world’s largest copper projects under construction and has a 10.5-million-tonne mineral resource, and a 6.9-million-tonne ore reserve.
The project is expected to operate for about 20 years and will produce at a rate of two-million tonnes of copper in concentrate a year during the first five years of operation.
The transaction and project capital costs have been fully funded through a combination of equity and long-term debt, which would be arranged through a Chinese banking syndicate.