PERTH (miningweekly.com) – Diversified miner GlencoreXstrata has sold its Las Bambas copper project, in Peru, to a consortium of investors, including Hong Kong-listed MMG, for $5.85-billion.

The consortium would be responsible for all capital expenditure (capex) and costs incurred in developing Las Bambas between January this year, and the closing of the offer. At the end of March, since the beginning of the year, the project had incurred capex of about $400-million.

The Las Bambas project is one of the world’s largest copper projects under construction and has a 10.5-million-tonne mineral resource, and a 6.9-million-tonne ore reserve.

The project was expected to operate for about 20 years and would produce at a rate of two-million tonnes a year of copper in concentrate during the first five years of operation.

MMG CEO Andrew Michelmore said on Monday that the acquisition of Las Bambas was a transformational one for MMG.

“We are pleased to lead this joint venture and establish a strong platform in one of the world’s most prospective mineral precincts. Our investment in this project of national importance is the first step in what we see as a long-term relationship with Peru.”

Michelmore added that the acquisition of Las Bambas to the MMG portfolio delivered on the company’s growth strategy and vision – to build a global diversified minerals and metals company.

Glencore CEO Ivan Glasenberg said over the weekend that the sale of the Las Bambas project demonstrated the company’s commitment to maximising value for shareholders.

“Since we acquired Xstrata in 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 use the sale proceeds to create additional shareholder value.”

Glasenberg said that the proceeds from the sale would de-gear Glencore’s balance sheet, adding that the company was eager to identify opportunities to reinvest the capital in line with its returns criteria.

Any surplus capital would be returned to shareholders.

The transaction was subject to shareholder and regulatory approval, and would likely be completed in the third quarter of this year.

The consortium, which is 62.5% held by MMG, also included Guoxin International Investment Corporation, which holds a 22.5% interest, and Citic Metal Company, which holds a 15% interest.

The transaction and project capital costs have been fully funded through a combination of equity and long-term debt, which would be arranged through a Chinese banking syndicate.