Glencore Xstrata, the global commodity trader and metals producer run by Ivan Glasenberg, expects as many as four Chinese bidders for a Peruvian copper mine that may be valued at more than $5-billion.

“There are groups forming together and combining,” the billionaire CEO told reporters in London yesterday. “We see there will be at least three to four groups bidding. There is some other outside interest besides the Chinese consortiums.” A first round of bids is due this week, he said.

Chinese companies, including Chinalco Mining, MMG and Citic Resources Holdings are among those studying offers for Las Bambas, people with knowledge of the pro- cess have said. Glencore, based in Switzerland, is selling the mine as part of an agreement to win Chinese regulatory approval for its $29- billion takeover of Xstrata earlier this year.

The National Development and Reform Commission (NDRC), China’s top economic planning agency, which approves all major overseas acquisitions, usually restricts State-owned companies from making rival offers.

“We understand the NDRC sometimes doesn’t allow them to compete, but I think the interest that we’ve seen in China is very robust,” Glasenberg said. “There is very strong interest from some big major groups and they are not in the consortium, so it seems that they are going to compete.”

BMO Capital Markets and Credit Suisse Group are advising Glencore on the sale. Las Bambas could be valued at more than $5-billion, a person familiar with the matter said earlier this month.

Proceeds from the sale may be returned to shareholders, CFO Steve Kalmin told reporters. About $3-billion has been spent on the project so far. It is estimated to cost about $5,9-billion to complete, he said.

The Las Bambas mine is scheduled to produce 400 000 t/y of copper starting in 2015 for at least the first five years. Xstrata said in January it was building the project at a cost of $5,2-billion.

Glencore, the biggest publicly traded raw-materials supplier, hopes to close the sale by year-end, Glasenberg said on an August 20 conference call. The deal may not be completed until the first half of next year, Kalmin said.

The agreement with China, struck in April, which gave Glasenberg approval to buy Xstrata, requires Glencore to pursue the sale to a buyer approved by the country’s Commerce Ministry by September 30 next year.

The sale price will be the higher of two scenarios – either an evaluation by two independent investment banks or the total costs incurred by Glencore and Xstrata at the project, according to Glencore.

Magris Resources, the investment company founded by former Barrick Gold CEO Aaron Regent, is considering a bid for the mine, people familiar with the matter said last month. Jiangxi Copper, China’s largest producer of the metal, is also interested in Las Bambas, according to company secretary Pan Qifang.

Glencore last week raised its estimate of savings from the takeover of Xstrata to at least four times the initial projection. The acquisition Glencore completed in May will generate a minimum of $2-billion in synergies next year, the Switzerland-based company has said. Closing 33 Xstrata offices, firing workers and cutting costs at existing operations has saved $1,4-billion.

The purchase created the world’s fourth-biggest mining company, adding coal, nickel, zinc and copper mines to Glencore’s trading empire.

The deal was expected to generate annual cost savings “well above” the stated $500- million plan, Glasenberg, 56, said in May. Morgan Stanley estimates $800-million in savings.

Glencore has reviewed 88 projects acquired from Xstrata and decided to suspend 44 of them. The company has also raised the cost estimate for the Koniambo nickel project, inherited from Xstrata, by $1-billion, to $6,3-billion. The cost of expanding the operation has also been increased by about $800-million from an earlier estimate.

Glencore last month wrote down the value of assets acquired in the takeover by $7,7-billion to reflect “the broader nega- tive mining industry environment”.

The company, the world’s biggest exporter of power station coal, reported a first-half net loss of $8,9-billion on the writedowns.