Glencore’s Australia, Chile mines up for sale


ZURICH: Mining giant Glencore, under pressure from a crash in commodity prices and weighed down by debt, announced on Monday it had begun talks to sell copper mines in Australia and Chile.

“The sale process is in response to Glencore receiving a number of unsolicited expressions of interest for these mines from various potential buyers,” the firm said in a statement.
It warned that the process “may or may not result in a sale” of the two mines.

The mines in question are the Cobar mine in southwestern Australia and the Lomas Bayas in the Atacama desert in Chile.

The debt-laden Swiss company, which has been hard-hit by a commodity price collapse, has faced wild fluctuation in its share price in recent weeks amid investor fears that sinking commodity prices will affect its ability to meet outstanding debt obligations.

At the beginning of September, Glencore announced a series of drastic moves aimed at cutting its towering $30-billion debt by a third.

Among other measures, the company has raised $2.5 billion in share sales, has halted dividend payments until further notice and has said it will sell off a number of assets.
Glencore has already mothballed output at two copper projects in Africa, and closed a platinum mine in South Africa.

And last week, the mining giant announced it would slash its output of zinc by a third by suspending zinc operations at mines in two mines Australia and Peru, and cutting production elsewhere.

Following Friday’s announcement, the company’s share price surged seven percent to close at 129.1 pence in London trading.

But investors remain concerned that Glencore might still see its credit rating cut, which would increase its financing costs at a time when the cash-hungry sector is facing falling prices.

The company said Monday it would not provide further information on the possible copper mines sales until they had been concluded “or disclosure is otherwise required.”     AFP


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