Canada’s move to protect mining sector shields takeover targets
Teck Resources spent much of last year fending off Glencore’s $23 billion takeover attempt before the Swiss company opted instead to just buy the company’s steelmaking coal business.
Glencore (LON: GLEN) has reportedly abandoned plans to sell its stake in Kazakhstan’s mining company Kazzinc after potential buyers failed to match its valuation of the zinc, lead and precious metals producer.
The company has now sent a termination letter to the bidders, people familiar with the matter told Bloomberg News, asking not to be identified.
Kazzinc, in which Glencore holds a 70% interest, operates a vast network of mines, concentrators, and metal finishing plants throughout Kazakhstan. It was established in 1997 following the consolidation of three major non-ferrous metals companies in eastern Kazakhstan, the majority of which were government-owned. Magna has reached an agreement with Glencore to process a bulk sample from the surface of Crean Hill.
Glencore has also resumed plans to offload the Kazzinc-operated Vasilkovskoye gold mine, according to the report, having cancelled a previous sale about seven years ago.
Chief executive Gary Nagle has carried out Glencore’s previous boss Ivan Glasenberg’s strategy of streamlining the company by divesting smaller and challenging assets.
Glencore put up its stake in Peruvian zinc and silver miner Volcan for sale last year and inked a deal in May to sell it to Transition Metals, a subsidiary of Integra Capital.
While zinc prices have seen a boost this year due to supply constraints, the metal’s future prospects are uncertain due to its heavy reliance on the struggling construction sector.
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