HONG Kong-based CST Mining Group said yesterday that it has made an initial agreement to sell its Peruvian copper project to Glencore for $475 (£289m).
The Swiss mining giant has signed a memorandum of understanding agreeing to buy CST Resources, a subsidiary of CST Mining registered in the Cayman Islands, which indirectly owns the Mina Justa project in southern Peru.
The project would give Glencore access to a resource base of more than 3 million tonnes of contained copper. The memorandum follows the recent acquisition of Zambian copper producer Sable for $28m.
Glencore’s quarterly results released yesterday showed strong improvement in the group’s metals and mining assets.
Total zinc production was up 55 per cent to 127,000 metric tonnes, including a 10 per cent increase in production at Kazzinc, the Kazakh zinc producer, where the group has used $3.2bn of the IPO proceeds to increase its stake from 50.7 per cent to 93 per cent.
According to a statement on the Hong Kong stock exchange, CST Mining and Glencore are expected to formalize a sale by July and complete the disposal by October.
Shares in CST Mining rose to HK$0.25 yesterday afternoon following the announcement before closing at HK$0.22, up 12.8 per cent on the day before.