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Glencore Xstrata to sell Las Bambas

The Anglo-Swiss natural resources firm will sell copper mine project in Peru.

Glencore Xstrata has commenced a process to sell its entire stake in the Las Bambas copper mine project in Peru.

Located near Cusco in Peru with over 10.5 million tonnes of copper resources, the project is currently in advanced phase of construction and is due to begin production in 2015.

The company announced that the sale will be as per the Merger Remedy Commitments made to the Ministry of Commerce of the Peoples' Republic of China (MOFCOM) in April 2013.

The firm has hired BMO Capital Markets and Credit Suisse Securities (Europe) to act as financial advisors for the sale.

In addition, the company is planning to suspend its iron ore production at the Ernest Henry copper mine in Queensland, Australia due to fall in prices and rise in operating costs.

The mine produced about 500,000 metric tonnes of magnetite, a form of iron ore, in 2012.

A spokeswoman at Ernest Henry Mining was quoted by Reuters as saying: “The business case, which made magnetite production a positive contribution to Ernest Henry’s operations, is not supported in the current market. Falling revenue, increasing production costs and ongoing high logistics costs in getting our product from mine to market have eroded the margins in this business.”