Glencore to sell some assets in Australia and Chile

12 October 2015

Mining and trading giant Glencore Plc today said that it would announce the proposed sale of some assets in Australia and Chile, prompting a halt in trading of its Hong Kong-listed shares.

The move comes as part of its plan to raise money to reduce its massive $30-billion debt pile and revive its shares, which have plunged by 57 per cent this year amid a slump in commodities and a slowdown in China.

The Baar, Switzerland-based company told the Hong Kong Exchange it would soon publish ''information regarding certain of its assets in Australia and Chile which constitutes inside information''.

Glencore did not reveal what assets it intends to sell, but it owns silver, copper, coal, nickel and zinc mines as well as port terminal assets and farms in Australia. It also owns a 44-per cent stake in the Collahuasi mine, a two-third stake in a hydro-power project Energia Austral, the Altonorte copper smelter and the Punitaqui copper mine in Chile.

The company may sell agricultural assets in Australia, which came into its portfolio through its 2012 acquisition of Canada's Viterra for C$6.1 billion.

Like other mining groups, Glencore is facing the brunt of the decline in commodities demand mainly from China, which in turn has driven down the price of raw materials. Copper has fallen below $5,000 per tonne, while thermal coal is trading below $60 per tonne.

Last month, Ivan Glasenberg,  CEO of Glencore, revealed a plan to raise $10.2-billion in order to reduce the company's debt by $10 billion amid growing concern from investors. The plan involves the company suspending its dividend and offloading some assets (See: Mining and commodities major Glencore to suspend dividends, sell assets).

Early this month Glencore announced that it would reduce mine production by 500,000 tonnes of zinc metal per annum and started the process to sell its wholly-owned Cobar copper mine in Australia and Lomas Bayas copper mine in Chile (Glencore to cut annual zinc production by 500,000 tonnes).

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