Mining firm Xstrata has confirmed reports from earlier in the week that Glencore International will exercise its option to buy back its Prodeco coal operations in Colombia.
Under the option agreement, Glencore will pay Xstrata $2.25 billion in cash upon completion of the sale.
The Prodeco business comprises the Calenturitas and La Jagua open pit thermal coal operations, export port facilities and a 39.8% share in a railway in Colombia.
Glencore sold the mines to Xstrata in 2009 as its share of Xstrata’s rights issue.
Showing posts with label glencore. Show all posts
Showing posts with label glencore. Show all posts
Friday, March 5, 2010
Thursday, March 4, 2010
Glencore Looking To Buy Back Prodeco Coal Mines
Commodity trader Glencore is expected to buy back its Prodeco coal mines in Colombia from Xstrata for about $2.5 billion. Glencore was forced to give up the operations last year for $2 billion when it was short of cash, but it got an option to buy them back that expires later today.
The repurchase price is higher than the amount Glencore sold the mines for, reflecting the deal Glencore reached with Xstrata, however analysts noted the value of the mines could be higher still because of a rise in the price of thermal coal used in power stations.
Analysts expect a decision to be announced on Friday.
Glencore may seek a partner to help buy back Prodeco and was last month was reported to be holding talks with four possible parties. Brazilian miner, Vale, US coal miner, Alpha Natural Resources, Singapore sovereign wealth fund GIC and US private equity fund, First Reserve Corp. were all touted as possible partners.
The Prodeco operations include two opencast mines, port facilities and part ownership of a railway in Colombia.
Glencore agreed to sell the mines last year to pay for its share of a $5.9 billion rights issue by Xstrata as it did not have enough cash at the time. Glencore is Xstrata’s largest shareholder with a 35 per cent stake. The two parties struck an option for Glencore to buy back the mines for a price of $2.25 billion plus capital spent on the mines by Xstrata plus earnings from the business during the option period.
The repurchase price is higher than the amount Glencore sold the mines for, reflecting the deal Glencore reached with Xstrata, however analysts noted the value of the mines could be higher still because of a rise in the price of thermal coal used in power stations.
Analysts expect a decision to be announced on Friday.
Glencore may seek a partner to help buy back Prodeco and was last month was reported to be holding talks with four possible parties. Brazilian miner, Vale, US coal miner, Alpha Natural Resources, Singapore sovereign wealth fund GIC and US private equity fund, First Reserve Corp. were all touted as possible partners.
The Prodeco operations include two opencast mines, port facilities and part ownership of a railway in Colombia.
Glencore agreed to sell the mines last year to pay for its share of a $5.9 billion rights issue by Xstrata as it did not have enough cash at the time. Glencore is Xstrata’s largest shareholder with a 35 per cent stake. The two parties struck an option for Glencore to buy back the mines for a price of $2.25 billion plus capital spent on the mines by Xstrata plus earnings from the business during the option period.
Friday, February 6, 2009
Shandong In Plan To Buy 20m Tonnes Of Coking Coal
Reports from China suggest that the Shandong Coking Industry Association, which represents 55 large coking coal companies in Shandong province, has signed an agreement of intention to purchase 20 million tonnes of coking coal from Swiss firms Glencore and International Metallurgical Resources (IMR).
The deal is said to be worth $3 billion, however there is some scepticism amonigst analysts, especially as China only imported 7 million tonnes of coking coal in 2008.
"It is only an intention, not a firm supply contract," said an un-named official at the Shandong Coking Industry Association. The 20 million tonnes would be delivered over a year.
The coastal province of Shandong has a combined annual coking capacity of 45 million tonnes, and needs 60 million tonnes of coking coal a year, the association said.
The deal is said to be worth $3 billion, however there is some scepticism amonigst analysts, especially as China only imported 7 million tonnes of coking coal in 2008.
"It is only an intention, not a firm supply contract," said an un-named official at the Shandong Coking Industry Association. The 20 million tonnes would be delivered over a year.
The coastal province of Shandong has a combined annual coking capacity of 45 million tonnes, and needs 60 million tonnes of coking coal a year, the association said.
Friday, January 30, 2009
Bolivia To Take Controlling Stake In Glencore Zinc Smelter
Bolivia expects to take a controlling stake in a unit of Glencore International AG within weeks as it seeks to boost ownership over the country’s natural resources, Mining Minister Luis Alberto Echazu said.
Bolivia expects to conclude talks with Glencore over its Sinchi Wayra zinc and lead unit amid a drop in metals prices. He didn’t give more details on the size of the stake.
Bolivia's zinc output is expected to drop this year from about 345,000 tons in 2008. Bolivian revenue from all of its metals exports also will decline.
Sinchi Wayra has the capacity to produce 240,000 metric tons of zinc concentrate and 15,000 metric tons of lead concentrate annually, Glencore says on its Web site.
In 2007, Bolivia seized control of Glencore’s Vinto smelter. At the time, the government said it didn’t get a high enough sale price when it sold the smelter in 1996. The smelter was purchased by Glencore in 2005.
Source: Bloomberg
Full article
Bolivia expects to conclude talks with Glencore over its Sinchi Wayra zinc and lead unit amid a drop in metals prices. He didn’t give more details on the size of the stake.
Bolivia's zinc output is expected to drop this year from about 345,000 tons in 2008. Bolivian revenue from all of its metals exports also will decline.
Sinchi Wayra has the capacity to produce 240,000 metric tons of zinc concentrate and 15,000 metric tons of lead concentrate annually, Glencore says on its Web site.
In 2007, Bolivia seized control of Glencore’s Vinto smelter. At the time, the government said it didn’t get a high enough sale price when it sold the smelter in 1996. The smelter was purchased by Glencore in 2005.
Source: Bloomberg
Full article
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