Glencore sold a trio of mining assets for $290m, extending its retreat from unwanted projects and continuing a trend among the largest resource companies to streamline their portfolios as the commodities downturn bites.
The UK-listed miner confirmed the sale of Tampakan, a copper project in the Philippines. It also revealed deals to sell Falcondo, a nickel producer in the Dominican Republic, and Sipilou, another nickel project in Ivory Coast.
Glencore inherited the assets as part of its takeover of Xstrata, completed in 2013, but has not significantly invested in them. For a project such as Tampakan, it could cost close to $6bn to build a mine.
Ivan Glasenberg, Glencore’s chief executive, has repeatedly said he dislikes the risks of “greenfield” mining developments, preferring to seek growth by expanding existing mines or via deals.
“Tampakan is one of those giant greenfield deposits . . . that’s been on the table for a long time, but struggling to obtain development approvals in the Philippines,” said analysts at Numis.
Miners are battling a big slide in commodity prices as Chinese demand has slowed, meaning few are looking to invest in projects. Glencore, whose shares have reached their lowest level since its initial public offering in 2011, this week said it was cutting this year’s capital spending budget to $6bn, about three-quarters of the level it originally communicated to investors last year.
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