Snake swallow? Minmetals Resources acquires Peruvian copper company

China's insatiable appetite for copper has led to another major overseas acquisition, with Minmetals Resources, a subsidiary of China Minmetals Corporation, securing the Las Bambas copper mine in Peru. Known as the "big stomach king" for consuming 40% of the world’s copper, China is now expanding its reach, making this deal the largest overseas mining acquisition in the country over the past six years. On April 16, Minmetals, alongside two other state-owned enterprises, finalized an $8.55 billion cash deal to acquire the Las Bambas copper mine from Glencore Xstrata, one of the world’s leading commodities trading firms. For Minmetals, which has a market value of roughly HK$9 billion (about $1.15 billion), this acquisition is just a small step in its broader strategy to secure global resources. Las Bambas, currently under construction, is set to become one of the world’s largest copper mines, with an expected annual output of over 450,000 tons in its first five years of operation—equivalent to about 13% of China’s 2013 copper imports. The mine is expected to produce an average of 300,000 tons annually once it becomes fully operational. The sale by Glencore was driven by regulatory pressures, including anti-trust concerns. According to sources familiar with the transaction, the mine is a world-class asset, and without the need to divest due to regulatory scrutiny, it might not have been sold at all. Minmetals CEO Andrew Michelmore believes that the mine, with a daily processing capacity of 140,000 tons, will boost the company’s copper production by 1.5 times, potentially making it the top copper producer in Asia and placing it among the world’s top 15 producers. However, the path to acquiring such a valuable asset wasn't easy. Competitors like Chinalco and Jiangxi Copper were also in the running. Chinalco even consulted Goldman Sachs and Morgan Stanley to explore potential bids, but ultimately withdrew. Sources suggest that coordination among Chinese state-owned enterprises played a role in the final decision. Jiangxi Copper, a provincial SOE, was also active in the bidding process, though it later withdrew. Local officials in Jiangxi emphasized the importance of the deal, seeing it as a key step toward international expansion and increasing the province’s resource reserves. In fact, China has long been pursuing a global resource strategy. Chinalco already owns the Tromok Copper Mine in Peru, which is China’s largest overseas copper project and features the world’s largest single copper ore beneficiation line. With an estimated 12 million tons of copper resources, it holds nearly 19% of China’s domestic copper reserves. Chinalco expects the Tromok mine to produce 1 million tons of copper concentrate and 220,000 tons of metal copper annually, accounting for about 18% of China’s copper concentrate imports. Once fully operational, it will rank among the top 20 copper mines globally and is expected to operate for more than 30 years. With China importing 3.21 million tons of refined copper and 10.07 million tons of copper concentrate in 2013, securing overseas assets like Las Bambas and Tromok is crucial for ensuring supply stability. As these projects come online, they are set to reshape the global copper landscape and strengthen China’s position as a dominant player in the industry.

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