Under pressure mining and commodities giant Glencore is putting two copper mines in Australia and Chile up for sale.
Glencore says in a statement on Monday that it is offering up its Cobar mine in Australia and Lomas Bayas mine in Chile for sale after “receiving a number of unsolicited expressions of interest for these mines from various potential buyers.”
As a result of the interest, the company is kicking off a bidding process but stressed the assets may not end up being sold. Glencore shares in Hong Kong were suspended on Monday ahead of the announcement.
While the sale may be motivated by surprise approaches, those approaches could well have been motivated by Glencore’s recent share price troubles — the company’s stock collapsed 29% in just one day amid fears over how it will cope with its massive $US100 billion (£65.7 billion) debt pile given low copper prices.
Shares have since rebounded rather spectacularly, in part thanks to a rally for copper prices (the price of the metal had its best week in a month last week). But Glencore is still doing its best to reassure investors it is doing its best to tackle its debt pile.
The company, which keeps its trading activity veiled in secrecy, announced on Friday it was cutting zinc production at its mines in order to boost the price and is pursuing several asset sales and deals that JPMorgan estimates in a note sent to clients on Monday will raise $US10 billion (£6.5 billion) for Glencore. Selling off a few more mines to add to the pile could be an attractive option for Glencore.
Friday’s announcement sent the price of zinc soaring over 10%, but copper futures have been so far unmoved by Glencore’s Monday announcement — futures are up 0.3% at 7.28 a.m. BST (2.28 a.m. ET).