MMG leads group buying Peruvian copper project for US$5.85b
Investors show enthusiasm for a joint-venture agreement that gives the mainland state-backed miner a majority stake in Peru copper project
Shares of state-backed miner MMG jumped after it revealed it was leading a joint venture to buy a copper mining project in Peru for US$5.85 billion, as the acquisition would increase MMG's copper resources by 2.7 times and turn the firm into Asia's largest miner of the metal.
MMG, the overseas non-ferrous metals mining unit of state-owned China Minmetals, said it would form a joint venture with state-backed Citic Metal - a unit of Citic Group, China's largest conglomerate - and Guoxin International Investment to buy the Las Bambas project in Peru. Guoxin International is a unit of state-owned resources project manager Guoxin Group.
"The acquisition represents a significant step in achieving the group's objective to be recognised among the world's top mid-tier base metals mining companies," MMG said in a statement to the stock exchange yesterday.
The deal would make MMG Asia's largest listed copper miner by output, overtaking Jiangxi Copper, a Barclays research note said, adding: "It propels MMG into the big league of the top 15 copper mining companies."
The seller is Switzerland-based commodities major Glencore Xstrata. The sale of one of Glencore's major copper projects by September 30 is a condition for antitrust approval by China's Ministry of Commerce for Glencore's merger with Xstrata.
MMG will have a 62.5 per cent stake in the venture, while Guoxin International will have 22.5 per cent and Citic Metal 15 per cent.