Minerals Trading

Chile and Peru are No.1 and No.2 world producers of copper.  In 2002 and 2003, our company successfully completed a few small trades in copper from Corporacion del Cobre (CODELCO), the Chilean state-owned copper mining company to traders in the London Metal Exchange (LME). Small deals but very profitable.

THE REQUEST

Contacts in Mumbai, India knew of our familiarity with South American producers and language. We were asked to check if we could connect Indian smelter Birla Copper with potential JV partners to bid on a US$ 2 Billion copper project in Peru called “Las Bambas”. (2004)

THE BUYER

Hindalco Industries Ltd., a US$ 20 Billion Indian aluminum and copper manufacturing company, a subsidiary of the Aditya Birla Group. Its headquarters are located in Mumbai, India. (See Hindalco’s letter further down)

THE CHALLENGE

A few phone calls let us to find out the market was flooded with potential prospectors to bid. Every potential candidate around the world was already committed or was not financially capable.

HALLELUJAH…………WE FOUND ONE

We called our partners in Japan and after several weeks, they found an interested party. Mitsubishi Metals. They were interested in a hands-on approach, exactly what Birla Copper needed. Mitsubishi would explore, extract, process and ship its entire production to Birla in India.

With all documents to assure the intermediaries party’s commissions signed and notarized, the introduction was made, and Birla and Mitsubishi presented their bid.

NOT TO BE

The Birla-Mitsubishi bid was one of the finalists but at the last minute, the government of Peru eliminated any bidders from Japan. Main reason was that Japan had denied the extradition of former Peru’s president Alberto Fujimori, who had requested asylum in Japan after fleeing Peru on some political scandal. Mr. Fujimori had claimed dual citizenship (Japanese/Peruvian)

That was the end of a short-lived adventure and possibly millions of dollars in commissions over the expected 7-year project life.

The mineral business is highly profitable one but uncertain. Most production is government controlled and political. With every general election there is usually a new board and/or management. So, the contacts are here today and gone tomorrow.

Business Card