start here

start here

The Daily IKN email digest, get all daily posts sent to you next day (& no ads)

I say things on Twitter

6/4/13

Chinalco and China Minmetals lead the pack for Las Bambas

Unofficial word from Peru's Mining and Energy Ministry (MEM) (therefore no links, because this is gossip picked up) has two Chinese companies, Chinalco and MMG (subsidiary of China Minmetals) as frontrunners to bag the big prize of Las Bambas, which is up for sale as part of the terms of the recent fusion between Glencore and Xstrata. 

These two names come as little surprise, however. Although Las Bambas doesn't have to be sold to Chinese money, it's been assumed by the market that China's deal with Glencore would mean that China, via whatever company, gets first refusal on Las Bambas, a very big copper prize that's right up the alley of a country looking to secure copper resource supply. And as it happens, Chinalco via Toromocho and MMG via El Galeno both have presence in Peru already.

For what it's worth, if I had to put a dollar on the outcome of this I'd back MMG to win out. El Galeno has been stuck in a rut behind Conga in Cajamarca and Las Bambas would allow them to get to production status far more quickly. Meanwhile Chinalco already has lots on its plate in Toromocho and the government of Peru will be keen to see Las Bambas up and running as soon as possible without having to wait for Toromocho to get to 100% production status before the owners start getting serious.

A final thought: First Quantum (FM.to) owns Haquira, right next to Las Bambas. But it now also owns Panama Cobre and will surely move on that one first, so maybe FM.to will look to sell Haquira and monetize . That's just a side-issue, however.