Glencore buys back mine from Xstrata

SWISS-based commodity trader Glencore has bought back its Prodeco coal operations in Colombia from mining group Xstrata.

The purchase price still has to be finalised as it is partly based on capital Xstrata spent on the mines and Prodeco's earnings.

Analysts estimate it will be around $2.5bn (£1.8bn).

Xstrata chief executive Mick Davis said: “The acquisition of the Prodeco operations last year facilitated an orderly rights issue process during very challenging market conditions.

“Glencore’s decision to exercise its option provides Xstrata’s shareholders with a robust cash return on the initial purchase price and provides additional financial flexibility.”