Commodity trader and miner Glencore has pulled out of its planned $475m (£305m) acquisition of the owner of Peru's Mina Justa copper project, citing the seller's failure to satisfy necessary conditions.
Glencore, the world's largest diversified commodity trader, had announced in July it planned to buy a 70 per cent interest in Marcobre - owner of Mina Justa and the Marcona copper property - from CST Mining Group (0985.HK).
It had extended an initial October deadline for the deal to 30 November. "As not all of the conditions were satisfied by the New Long Stop Date, Glencore terminated the agreement with CST Mining Group in accordance with its terms," Glencore said.
Analysts welcomed Glencore's move as a sign the trader, which has signalled its appetite for deals, will not pursue acquisitions for the sake of growth alone.
"An unwillingness to execute M&A at any cost reinforces our view that management has a rigid attention to prudent capital allocation," Liberum analysts said in a note, adding Mina Justa was targeted to produce 110,000 tonnes of copper per year with capital expenditure of $745m.
The news comes as Newmont Mining Corp halted work on its $4.8bn Conga gold project in Peru after the government asked it to help calm violent protests.
In a filing to the Hong Kong bourse CST said it did not expect the cancellation to adversely impact its existing business or financial position, but shares in the group touched a record low of HK$0.078, down more than 20 per cent from the previous close.
CST said it would explore other options in relation to the Mina Justa Project.