Stalemate ended over Shell sale

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The Independent Online
THE oil company Royal Dutch Shell is on course to announce the dollars 1bn ( pounds 666m) sale of its metals and mining business to Gencor, the South African group, in the next two weeks.

The companies have been in discussion for more than a year but have made rapid progress since last month's general election in South Africa.

Last week, the proposed deal received the full blessing of the ruling African National Congress, clearing political uncertainty over the move.

The two sides are still haggling over price, and Shell is also thought to be reluctant to provide Gencor with warranties against environmental risks at its sites.

But sources close to the discussions said that the differences could be resolved by the end of this month - the self- imposed deadline set by the companies.

Hopes of a deal were further raised last week, when Shell formally called an auction of its one-third stake in the dollars 500m Collahausi copper mine in Chile, one of the world's biggest.

The auction, exclusively revealed by the Independent on Sunday, is aimed at breaking an impasse over pre-emption rights invoked by the mine's co- owner Minorco, controlled by Gencor's South African rival Anglo American, and Falconbridge of Canada.

However, Gencor is keen to buy the stake, and Shell has decided to break the stalemate by inviting a dozen international mining companies to bid for the stake by the end of August. Those thought to have been invited to the auction include Britain's RTZ Corporation and BHP of Australia.