Glencore, two more groups interested in long-term copper contract with Romania's Cupru Min, bid set for mid-October

Three companies have so far shown interest in buying copper concentrate from Romanian state-owned company Cupru Min. Turkish Yildirim Holding, Dutch Trafigura and Swiss Glencore recently submitted offers to buy the raw material, well before the October 14 bidding deadline, when final offers are expected. The state has put up for sale the copper production for the following seven years at Cupru Min for some EUR 346 million. The state's offer is an alternative to privatizing the company, after a failed attempt in 2012. The state offered Cupru Min in spring last year for some EUR 57.3 million, but the privatization was cancelled because of misunderstandings with the winner of the bid, Roman Copper, which later sued the state. The state now wants to sign the seven-year contract for the raw material, with the payment in advance. On Friday, September 6, the state will check whether the bidders who submitted offers so far have respected the eligibility criteria, and then give a one-month deadline for the potential buyers to check the data room and draft final offers. From September 23, potential buyers will have to submit preliminary offers and addenda to the contract after which a negotiation with the state will begin. This will end on October 8, with final offers expected until October 14. The offers will be opened on October 15, when a winner should be named. The winner will have to pay EUR 40 million upfront and then pay for Cupru Min's production in the next seven years, according to Economy Minister Varujan Vosganian. The advance payment will be used for investments in technology, environment protection and re-opening extraction areas. The targeted investors should provide a EUR 1.2 million band guarantee letter, a reliability letter of EUR 40 million and have to offer at least EUR 6,900 per ton of copper. Glencore, one of the companies, which showed interest so far, is the largest petrol, metal, mineral resources and goods trader, with a yearly turnover of over USD 200 billion. The Dutch group Trafigura has activities throughout the world, and a yearly turnover of some USD 120 billion. Yildirim recently took over Mechel Chrome in Russia for USD 425 million. editor@romania-insider.com