LONDON/MELBOURNE – Glencore (GLEN.L) plans to sell copper mines in Australia and Chile as the mining and trading company aims to reduce a debt burden accumulated in an asset buying spree that has shaken confidence in the Swiss-based firm.
Selling assets is one element of a broad plan to cut about a third of Glencore’s $30 billion (19.6 billion pounds) net debt and to regain the trust of investors after its shares tumbled to record lows this year amid weak global commodity prices.
Glencore said it would sell its wholly-owned Cobar copper mine in Australia and Lomas Bayas copper mine in Chile after receiving interest from potential buyers.
“This will allow potential buyers to bid to purchase either one or both of the mines and may or may not result in a sale,” Glencore said in a statement on Monday.
A London-based analyst said the Cobar and Lomas Bayas mines together could fetch less than $300 million as they are very small.
Cobar produces about 50,000 tonnes of copper in concentrate per annum, while the Lomas Bayas mine’s annual output is about 75,000 tonnes of copper cathode.
“When you’ve got $50 billion in gross debt, it doesn’t move the needle. But it’s just another reminder that everything’s potentially for sale at the right price,” the analyst said.
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