Beijing/London - Glencore and Xstrata
cleared the final hurdle in their long-running merger plan on Tuesday, when
China's Ministry of Commerce conditionally backed the $35bn deal.
The ministry said it would approve the
largest merger in mining history as long as the new company sold off assets in
its Las Bambas copper mine in Peru within three months - a condition which
Glencore and Xstrata had been waiting for
months for China, the biggest buyer of the materials it trades and mines, to
give the regulatory the go-ahead. Glencore had said it would complete the
takeover by May 2 if it got Chinese approval this week.
In a statement on its website, the ministry
also said Glencore should provide certain amounts of copper, zinc and lead
concentrates to Chinese clients every year to 2020.
Glencore said on Tuesday it would begin the
sale process for Las Bambas, an Xstrata greenfield mine which is set to start
operating in 2015, producing more than 400,000 tonnes of copper a year for at
least the first five years.
Glencore had already agreed to scrap an
exclusive zinc sales agreement with producer Nyrstar to win approval for the
Xstrata deal in Europe. On Tuesday, Nyrstar said Glencore would pay it a
termination fee of €44.9m.
Separately, Xstrata said several top
executives would leave the company before the takeover, including the head of
copper Charlie Sartain and the head of nickel Ian Pearce.
Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.