Glencore exercises option to buy Xstrata's Prodeco

Glencore, the secretive Swiss commodities-trading group, yesterday exercised an option to buy back the Colombian coal miner Prodeco, a year after selling the company to Xstrata.

Privately owned Glencore will pay around $2.5bn (£1.65bn) for Prodeco and while it refused to comment on its plans for the coal miner, it is understood that the group is in discussions with a number of parties, including the Brazilian mining giant Vale, about a possible sale. Glencore has committed to disposing of $1bn (£660m) worth of assets in the next three to six months.

Sources close to Glencore yesterday said that "the usual suspects" are in talks about buying the asset or taking a significant stake in it. Discussions have already taken place between Glencore and Vale, as well as with US coal miner Alpha Natural Resources, the Singaporean sovereign wealth fund, GIC, and energy investor First Reserve.

Glencore's move to buy Prodeco comes after it agreed to sell the miner to Xstrata in January last year. The trading group holds a 34.5 per cent in Xstrata. The agreement over Prodeco allowed Glencore to take part in the Zug-based Xstrata's fundraising move, which included a £4.1bn rights issue.

Sources say that Glencore values Prodeco at as much as $5bn (£3.3bn).