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GLENCORE XSTRATA PLC - Sale of Las Bambas Copper Mine Prpject

Release Date: 14/04/2014 08:00
Code(s): GLN     PDF:  
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Sale of Las Bambas Copper Mine Prpject

GLENCORE XSTRATA PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
HKSE Share Code: 805HK
ISIN: JE00B4T3BW64

Baar, Switzerland

SALE OF LAS BAMBAS COPPER MINE PROJECT

14 April, 2014

Glencore Xstrata plc (“Glencore”) has signed an agreement for the sale of its entire interest
in the Las Bambas copper mine project (“Las Bambas”) to a consortium owned 62.5% by
MMG Limited, 22.5% by GUOXIN International Investment Corporation Limited and 15.0%
by CITIC Metal Co., Limited (the “Consortium”).

The consideration for the transaction is approximately US$5.85 billion, payable to Glencore
in cash on closing. In addition, all capital expenditure and other costs incurred in developing
Las Bambas in the period from 1 January 2014 to closing will also be payable by the
Consortium. At the end of March 2014, capital expenditure and other costs incurred since
the start of the year amounted to approximately US$400 million.

The proceeds from the sale will immediately and materially de-gear Glencore’s balance
sheet. Glencore will continue to look for opportunities to reinvest capital in line with our
published returns criteria. Any surplus capital, subject to maintaining an efficient balance
sheet within Glencore’s strong BBB/Baa credit ratings guidance, will be returned to
shareholders, within an appropriate time frame and structure.

The transaction is subject to certain regulatory approvals (including MOFCOM) as well as
the approval of MMG Limited shareholders. China Minmetals Non-Ferrous Metals Company
Limited, which holds approximately 74% of the share capital of MMG Limited, has
irrevocably committed to vote in favour of the transaction. The transaction is expected to
close prior to the end of Q3 2014 and is being conducted pursuant to the Remedy
Commitments entered into with MOFCOM at the time of Glencore’s merger with Xstrata.

Commenting on today’s announcement, Ivan Glasenberg, CEO of Glencore said:

“Today’s announcement demonstrates our commitment to maximising value for our
shareholders. Since we acquired Xstrata on 2nd May 2013, our team has taken decisive
steps to de-risk Las Bambas, which has culminated in this compelling offer from the
Consortium. Our willingness to sell reflects the level of the offer and our conviction that we
can utilise the sale proceeds to create additional shareholder value.”


BMO Capital Markets Limited (“BMO Capital Markets”) and Credit Suisse Securities
(Europe) Limited (“Credit Suisse”) are acting as financial advisors to Glencore in connection
with the sale.


For further information, please contact:
                                             
    Charles Watenphul (Media)             Paul Smith (Investors)
    t: +41 (0) 41 709 2462                t:+41 (0)41 709 2487
    m: +41 (0) 79 904 33 20               m: +41 (0)79 947 1348
    charles.watenphul@glencore.com        paul.smith@glencore.com


About Glencore Xstrata

Glencore Xstrata is one of the world’s largest global diversified natural resource companies.
As a leading integrated producer and marketer of commodities with a well-balanced portfolio
of diverse industrial assets, we are strongly positioned to capture value at every stage of the
supply chain, from sourcing materials deep underground to delivering products to an
international customer base.

The Group’s industrial and marketing activities are supported by a global network of more
than 90 offices located in over 50 countries. The Group’s diversified operations comprise
over 150 mining and metallurgical sites, offshore oil production assets, farms and agricultural
facilities. We employ approximately 190,000 people, including contractors.

About Las Bambas

Las Bambas is a long-life copper development project with prospective exploration options.
Located in Cotabambas, Apurimac Region of Peru, the project is at an advanced stage of
construction and is scheduled to commence production in 2015.

As at 31 December 2013, Las Bambas had gross assets of US$4,420 million. Given that the
project is still in a pre-production phase, Las Bambas’ total profit for the financial year ended
31 December 2013 was US$(0.02) million.

                                             
Forward looking statements

This document contains statements that are, or may be deemed to be, “forward looking
statements” which are prospective in nature. These forward looking statements may be
identified by the use of forward looking terminology, or the negative thereof such as "plans",
"expects" or "does not expect", "is expected", "continues", "assumes", "is subject to",
"budget", "scheduled", "estimates", "aims", "forecasts", "risks", "intends", "positioned",
"predicts", "anticipates" or "does not anticipate", or "believes", or variations of such words or
comparable terminology and phrases or statements that certain actions, events or results
"may", "could", "should", “shall”, "would", "might" or "will" be taken, occur or be achieved.
Such statements are qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Forward-looking statements are not based on historical
facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives,
goals, intentions and projections about future events, results of operations, prospects,
financial condition and discussions of strategy.

By their nature, forward looking statements involve known and unknown risks and
uncertainties, many of which are beyond Glencore Xstrata’s control. Forward looking
statements are not guarantees of future performance and may and often do differ materially
from actual results. Important factors that could cause these uncertainties include, but are
not limited to, those discussed on pages 18 to 31 of Glencore Xstrata’s Annual Report 2013.

Neither Glencore Xstrata nor any of its associates or directors, officers or advisers, provides
any representation, assurance or guarantee that the occurrence of the events expressed or
implied in any forward-looking statements in this document will actually occur. You are
cautioned not to place undue reliance on these forward-looking statements which only speak
as of the date of this document. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules and the Disclosure and Transparency
Rules of the Financial Conduct Authority and the Rules Governing the Listing of Securities
on the Stock Exchange of Hong Kong Limited and the Listing Requirements of the
Johannesburg Stock Exchange Limited), Glencore Xstrata is not under any obligation and
Glencore Xstrata and its affiliates expressly disclaim any intention, obligation or undertaking
to update or revise any forward looking statements, whether as a result of new information,
future events or otherwise. This document shall not, under any circumstances, create any
implication that there has been no change in the business or affairs of Glencore Xstrata
since the date of this document or that the information contained herein is correct as at any
time subsequent to its date.

Disclaimer

BMO Capital Markets, which is authorised and regulated by the Financial Conduct Authority
in the United Kingdom, and Credit Suisse, which is authorised and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the United Kingdom, are acting
for Glencore Xstrata plc and for no one else in connection with the sale process and will not
be responsible to any person other than Glencore Xstrata plc for providing the protections
afforded to clients of BMO Capital Markets or Credit Suisse, nor for providing advice in
relation to the sale process, the content of this announcement or any matter referred to
herein. Neither BMO Capital Markets, Credit Suisse nor any of their respective subsidiaries,
branches or affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of BMO Capital Markets or Credit Suisse in connection with this
announcement, any statement contained herein or otherwise.

Sponsor

Absa Bank Limited (acting through its Corporate and Investment Banking Division)



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