The much anticipated showdown between the Chinese state’s copper giants bidding for Glencore Xstrata’s Las Bambas site in Peru won’t be happening after all. Or the competition did take place, but in the form of lobbying within state structures. Unnamed sources quoted by Reuters say Chinalco, one of the two top contenders, will not bid for the project, leaving Minmetals as the front runner, presumably with the blessing of the National Development and Reform Commission. Jiangxi Copper, written about in this blog mostly because of their pioneering activities in Greenland, were at some point also said to be bidding for the Peruvian mine, but now it looks like competition between state-owned companies will be prevented. Talk has emerged today of a possible non-Chinese bid, by a group including Newmont and Canada’s Teck Resources. The asset is being sold at all in order for Chinese regulators to approve the takeover of Xstrata by Glencore.
Peru’s minister of mines Jorge Merino, in China for a few days, is to meet with Chinalco and Minmetals officials. Both companies are bidding to buy Glencore’s Las Bambas copper mine. A third state-owned metals giant, Jiangxi Copper, had also shown interest, though it’s less clear if it’s still being considered. The minister will still meet with them anyway, perhaps to talk about their other activities in the country. Remarkably enough, at least two state-owned Chinese companies are competing for a project, which isn’t often the case.
Glencore has been told by Chinese regulators to dispose of Las Bambas, worth perhaps almost $6bn, as a condition for their approval of the takeover of Xstrata. All three companies already have operations in Peru.
I wrote a few months ago about Jiangxi Copper’s interest in a Greenland mine, a project that isn’t making much news at the moment.