Glencore takes 70% stake in Peru copper project owner

Glencore is widely expected to unveil some serious takeover deals in the coming years - today it offered a taste of what could follow.

The commodities trading giant said it is buying a 70% stake in the owner of Peru's Mina Justa copper project for $475 million (£295 million), an offer it expects to complete in October.

That's small beer compared to what many predict. Analysts think Glencore would like to buy miner Xstrata and was said last month to have made an informal approach to Kazahstan's ENRC.

ENRC shares jumped on the report, later rebuffed by Glencore.

Today's deal is Glencore's first since its controversial flotation on the London Stock Exchange which was hit by fears the commodity market is overvalued. Today the stock, floated at 530p, fell 3.82p to 493.08p.

The industry is seeing a round of copper consolidation, the latest example being China's Jinchuan's beating Brazil's Vale with its bid for South African-listed miner Metorex this month.

Analysts said Glencore would be paying $0.54 per pound of copper reserve against $0.94 per pound in Jinchuan's bid for Metorex.

"While the 43% discount reflects the earlier development status of the project, the deal nevertheless looks to be attractively priced for Glencore and further underscores Glencore's aspirations to realise rapid growth through organic and opportunistic acquisitive growth," Liberum analysts said.