* Las Bambas mine expected to fetch $5-6 billion
* Sale would increase shareholder return expectations
* Minmetals bidding with Citic and Guoxin
By Anjuli Davies
LONDON, March 17 Glencore Xstrata could
reach an agreement as soon as this week over the sale of its
large Peruvian copper mine Las Bambas to a Chinese consortium
led by Minmetals, two sources with knowledge of the situation
A sale of Las Bambas, which would be one of China's largest
acquisitions of a mining asset in years, would raise hopes that
Swiss-based Glencore will return cash to shareholders via a
share buyback or special dividend.
Commodities trader Glencore agreed last year to sell Las
Bambas to secure approval from competition authorities in top
metals consumer China for its $46 billion takeover of mining
The London-listed group said this month that it had chosen a
consortium led by Minmetals as its preferred bidder for the
copper project, but the two parties have failed to agree a
Representatives of the Chinese consortium are flying to
London for talks with a Glencore delegation, the first source
said, and an agreement could be reached as soon as this week.
The gap in price expectations has narrowed in recent weeks,
the source added.
Glencore declined to comment on negotiations and Minmetals
was not immediately available to comment outside Chinese
business hours, though banking and industry sources said that
Las Bambas could fetch between $5 billion and $6 billion.
The sale, initially expected to be concluded by the end of
2013, was delayed first by some bidders requests for further due
diligence and then by disagreement on price with Minmetals.
MMG, the Hong Kong-listed offshore arm of China
Minmetals Corp, is bidding alongside two other
Chinese companies: investment business Citic and natural
resources and infrastructure group Guoxin, sources
Other companies interested in Las Bambas were China's
largest aluminium producer Chinalco and a Western
consortium that included miners Teck Resources,
Newmont Mining and private equity firm Blackstone Group
Glencore said this month that it would use the proceeds from
the sale of Las Bambas to repay debt, invest in new assets and
return cash to shareholders.
Analysts said the sale would make it more likely that
Glencore will be one the first large miners to return extra cash
to shareholders through a share buyback or special dividend.
Global miner BHP Billiton in February
hinted that it may launch a share buyback as early as August.