Glencore Backs $1.4 Billion Bid for Stake in Eurasian Resources Group
Glencore Proposes Financing Deal to Support $1.4 Billion Bid for Eurasian Resources Group Stake
Mining giant Glencore is considering supporting a $1.4 billion bid by Kazakh entrepreneur Shakhmurat Mutalip to acquire a 40% stake in Eurasian Resources Group (ERG), according to reports citing people familiar with the discussions.
Under the proposal, Glencore would provide an upfront pre-payment of about $800 million in exchange for future shipments of ferrochrome, a key raw material used in steel production. The arrangement would help finance Mutalip’s bid while securing long-term supply of the alloying metal for the company.
Negotiations around the deal are said to be advancing, with Mutalip’s offer reportedly moving ahead of a competing bid from Shukhrat Ibragimov, the chief executive of Eurasian Resources Group and son of the company’s co-founder, Alijan Ibragimov.
If completed, the transaction would represent one of the largest recent ownership changes involving the Kazakhstan-based mining group, which is a major global producer of ferrochrome and other metals.
Glencore has previously shown interest in the company. In 2011, the commodities giant reportedly attempted to acquire the former FTSE 100-listed miner in a deal valued at about £12 billion.
In parallel with the current discussions, Glencore and Mutalip are also said to be negotiating the possible sale of Glencore’s 70% stake in Kazakh mining company Kazzinc. That stake could be valued at roughly $3.5 billion, according to people familiar with the talks.
The potential transactions highlight increasing investor interest in Kazakhstan’s mining sector and could reshape ownership structures in some of the country’s most significant resource assets.
SOURCE:mining.com
