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Glencore to close Mina Justa deal in October

Reuters | Mon, 18 Jul 2011 11:56

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[] -- GLENCORE expects to close its $475m acquisition of a 70% stake in the owner of Peru's Mina Justa copper project in October, it said on Monday.

Hong Kong-listed CST Mining Group announced last month it had sold its CST Resources unit to Glencore. CST Resources indirectly owns 70% of Marcobre, the sole owner of the Mina Justa project, which has a resource of 413.3 million tonnes with 0.79% copper.

Glencore's head of zinc, copper and lead said Mina Justa complemented Glencore's existing mining operations in Peru.

The industry is seeing a round of copper consolidation, the latest example of which being China's Jinchuan's beating Brazil's Vale with its bid for Metorex earlier in July.

Analysts at Liberum said on Monday that Glencore would be paying $0.54 per pound of copper reserve against $0.94 per pound in Jinchuan's bid for Metorex.

"While the 43% discount reflects the earlier development status of the project, the deal nevertheless looks to be attractively priced for Glencore and further underscores Glencore's aspirations to realise rapid growth through organic and opportunistic acquisitive growth," Liberum analysts said.

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