The approval from Chinese antitrust authority is subjected to few conditions including Glencore’s divestment in Peruvian copper mine Las Bambas in a $5.2bn deal.
Also, the sale should be concluded by 30 June 2015 to a buyer approved by MOFCOM, besides entering into a binding and purchase agreement with buyer before 30 September 2014.
Las Bambas is scheduled to commence production by 2014 and increase the output rate to 400,000 metric tons of copper production annually.
However, if the company fails in offloading its stake in Las Bambas, the company will be liable to auction its stake in kan, Frieda River, El Pachón or Alumbrera, as designated by MOFCOM.
In addition, Glencore has agreed for eight-year supply agreement to offer copper, zinc and lead to Chinese customers under long-term contracts.
By securing the approval from Chinese authority, the companies have completed approval process for the merger, since Glencore has already obtained consent from the European Commission and South African competition authority.
Meanwhile, Xstrata plc Chief Executive Officer Mick Davis has agreed to step down downplaying the six month role as CEO of newly formed company Glencore Xstrata, thereby procuring £4.62m towards compensation for early termination.
