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High sale price for Las Bambas thanks to Glasenberg's negotiating skills - analysts

April 14, 2014 - 14:39 GMT Location: London

KEYWORDS: Las Bambas , Glencore Xstrata , sale , MMG , analysts , reaction

Analysts have highlighted the high sale price, as well as Ivan Glasenberg's "strong negotiating skills", following Glencore Xstrata's sale of the Las Bambas copper project to a consortium of Chinese companies.

In April 2013, it was announced that Glencore needed to sell the stake in the Las Bambas copper project in Peru once it completed its takeover of mining company Xstrata, as one of the structural and behavioural conditions it needed to meet to satisfy the Chinese regulator's requirements.  The consortium buying the project, led by MMG, the international unit of China Minmetals, paid a total of $5.85 billion for the project, almost a year after the Chinese Ministry of Commerce made the sale of Las Bambas a condition for the merger. "[It was] the high end of the range for a consensus of $5-$6 billion," Liberum Capital analysts said in a note. If Glencore had not entered into a binding agreement by September 30 2014 or had not concluded the transfer of its ownership interest by June 30 2015, it would need to bring in...

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