Xstrata plots $700m sale of Chile's El Morro mine
Sunday 09 August 2009
Xstrata, the Ftse-100 mining group that is locked in a merger battle with peer Anglo American, is in talks to sell a key project in South America for up to $700m (£420m).
The £24.1bn-valued group, led by chief executive Mick Davis, is considering selling its 70 per cent stake in El Morro, a Chilean copper mine Xstrata inherited as part of its takeover of rival Falconbridge in 2006. An industry source said that Chinese companies are particularly interested.
The cash would be used to help develop other projects similar to El Morro, in that they are not fully developed, as well as operational mines. Xstrata has 10 copper mines globally, as well as coal, nickel and steel operations.
The buyer would have to invest at least $1bn to develop El Morro fully, as well as work with 30 per cent shareholder New Gold.
Charles Kernot, mining analyst at Evolution Securities, said the sale would help the miner, as "Xstrata is still somewhat constrained by debt. So it has to pick and choose which projects it invests in," he added.
A spokeswoman said: "Xstrata has received expressions of interest that may result in the introduction of an additional partner into the El Morro copper-gold project, or the sale of Xstrata's 70 per cent interest.
"We are evaluating the approaches we have received and no decisions have been made on whether or not to divest El Morro or dilute our stake."
The news comes as Xstrata is under increasing pressure to revise the terms of its merger approach to Anglo, which the £25.7bn group has rebuffed. Mr Davis has called for "a merger of equals", but many observers think Xstrata will have to pay a premium on any deal.
Xstrata closed at 811.5p on Friday, Anglo at 1,938p.
Lincoln MP Karl McCartney 'denied all knowledge' of the Twitter activity
Detective novelist who wrote Death comes to Pemberley passed away peacefully at her home, aged 94
Sites using the popular Gigya comment platform were attacked by the Syrian Electronic Army (SEA)
- 1 Sean Abbott: Messages of support flood in for bowler following death of batsman Phil Hughes
- 3 Girl, 7, gets Tesco to remove 'stupid' sign suggesting superheroes are 'for boys'
- 4 This letter from a reader explains why women can’t play football
Black Friday 2014: Opening times for Asda, John Lewis, GAME, PC World and Argos
Miss Honduras Maria Jose Alvarado's stylist Luis Alfredo Garcia is found stabbed to death
Sean Abbott: Messages of support flood in for bowler following death of batsman Phil Hughes
Dr Lam Hoe Yeoh: Voyeur doctor jailed for eight years after using network of hidden cameras to film patients, colleagues and friends on the toilet
'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...
£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...
£6000 - £60000 per annum + Bonus and Benefits: Ampersand Consulting LLP: UI De...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...