Chinese companies will continue buying overseas mining assets as the industry goes through structural changes and China looks to lower its dependence on resources controlled by foreign companies, He Wenbo, chairman of China Minmetals Corp., said on Sunday.
Responding to a question about the possibility of purchasing more assets from Glencore, He said Minmetals keeps in touch with all leading global mining companies. “We discuss everything we are interested in,” he said, without providing further detail. He spoke to Bloomberg on the sidelines of National People’s Congress meetings in Beijing.
Glencore Chief Executive Officer Ivan Glasenberg announced in September a debt cutting program that includes asset sales, among other steps. Minmetals purchased the Las Bambas project in Peru from Glencore in 2014 for $5.85 billion.
On the industry outlook for metals prices, He said: “Base metals prices fell rapidly last year and all big miners are suffering. Base metal prices will eventually stabilize unless we find revolutionary substitutes of base metals in next decades. Right now many metals prices are around their marginal costs. Such a situation won’t last for long.”
He said Minmetals’ acquisition of engineering and mining firm China Metallurgical Group will help boost the company’s competitiveness, by reinforcing each side’s strengths.
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“Minmetals has been turning into a mining company from a trading house, and we have an experienced management with global knowledge, while MCC is pretty good at designing and construction. We will be a good fit and will focus on overseas projects in line with China’s “One Belt One Road” plan to revive development in countries along the former Silk Road.
Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.
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