China on Tuesday cleared the way for Glencore International PLC (LON:GLEN), the world's biggest commodity trader, to buy global mining company Xstrata PLC (LON:XTA) in a $33 billion deal that has been 14 months in the making, according to a published report.
China’s Ministry of Commerce said on its website it would approve the deal provided the newly formed company sell its Las Bambas copper mine in Peru, reports Bloomberg News, citing three anonymous sources. The mine is currently owned by Xstrata.
The deal would bring Glencore -- already a major player in commodities like cotton and crude -- full steam into metals. It would become the fourth-largest mining operation by adding copper, zinc and nickel to its basket. The metals are important in construction.
The company announced it wanted to buy Xstrata in February 2012 and since then has won approval from regulators in South Africa, Australia and Europe.
While the news is still unconfirmed, traders reacted as if an announcement was imminent. Xstrata shares rose 5.40 percent to £1,018.50 ($1556.17) in London morning trading. Glencore shares were up 4.38 percent to £335.15.
Glencore reported a massive net income decline of 75 percent last year, due in large part to a decline in China’s economic growth and a loss of value of the company’s stake in Russian aluminum giant Rusal. Despite the losses, Glencore’s top five directors collected $410 million in dividends from the company last year.
Angelo Young is a general assignment business reporter who joined IBTimes in April 2012. Much of his career has been behind the scenes as a copy editor, assignment editor and...