|Xstrata and Glencore Merger Gets China Approval|
China has approved the merger of commodities trader Glencore and mining group Xstrata, clearing the final big hurdle in completion of the deal.
The nod came after Glencore agreed to sell its stake in Xstrata's copper mining project in Peru to a buyer approved by Chinese authorities.
It also agreed to supply a minimum volume of copper concentrate to China for a period of eight years.
The merger will form one of the world's biggest metals and commodities firms.
It was first announced in February last year, but the completion date has been pushed back several times, not least due to concerns over the influence the combined entity may have on the global commodity markets.
China, which is one of the world's biggest commodity consumers, had been examining what share a combined company would have in the market for copper concentrates.
Analysts said that by agreeing to sell its stake in the Peru project, which is being built from scratch, Glencore had not only satisfied a key concern of Chinese authorities but also that of many shareholders.
"Them being willing to sell Las Bambas shows there are no sacred cows in the eyes of the Glencore management," said Jeff Largey an analyst at Nomura.
"It shows they think a little differently - they've always shied away from greenfield projects.
"If they can pull value forwards on Las Bambas by selling it, rather than taking on all the operational and execution risk associated with building it [and] bringing it to production, I think the market will reward them," he added.
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Published on our website on April 17, 2013