Cecilia Jamasmie

Miner and commodities trader Glencore (LON:GLEN) is buying 26.73% of the voting shares in Peru’s largest zinc producer, Volcan Compañía Minera SAA, in a deal worth at least $531 million.

The Swiss company will pay $1.215 per class A common share, which will help it boost its current 7.68% interest in Volcan and which could cost Glencore as much as $956 million, depending on the level of acceptances.

“Volcan’s operations are located in the richest polymetallic production area in Peru, producing some of the highest quality zinc concentrates,” it said in the statement.

“The transaction will provide an increase and extension of Glencore’s zinc production profile and the opportunity for synergies with Glencore’s existing Peruvian zinc operations,” it added.

After the closure of the deal Glencore, which already is one of the world’s biggest zinc producers, will hold between 44.84% and 66.30% of the total class A shares and will have an economic interest in Volcan of between 18.98% and 28.07%.

The company, which has been a Volcan shareholder since 2004, said it expects to make the offer by no later than October 27 and that it hopes to complete the deal in November or December this year.

Founded in 1943, Volcan is mostly engaged in the exploitation of silver, zinc, copper and lead, but also operates hydroelectric power plants.

More to come…

PEOPLEMINE FACEBOOK LINKEDIN TWITTER EMAIL PRINT