A Chinese consortium is buying Glencore Xstrata’s stake in the Las Bambas copper mine in Peru for $5.85 billion in what has been called the largest overseas acquisition by China’s metal mining industry.
The consortium is led by MMG Limited, which owns 62.5% and includes China’s Citic Metal (15% stake) and 22% by GUOXIN International Investment Corporation Limited.
Glencore and Xstrata merged last year and China approved the deal on the basis that Glencore agreed to sell the Las Bambas project. The two companies control 7% of the world’s copper supply.
The mine is predicted to produce over 450,000 tonnes of copper per year which would total 13% of china’s total copper imports last year.
China has the world’s second-largest economy and demand for raw materials and metals have increased in order to fuel the growth in the country. Copper is heavily relied on as it is used in electronics production.
Funding for the takeover will provided by China Development Bank, ICBC and Bank of China.