Anglo-Swiss miner Xstrata has announced that Switzerland-based commodity trader Glencore International AG (Glencore) has decided to exercise its option to buy back Xstrata's Prodeco coal operations in Colombia.
Xstrata said that it received formal notification from Glencore on March 4, 2010. The company will pay Xstrata $2.25 billion, plus profits accrued and the net balance of any cash invested during the option period from January 1, 2009 until the completion of the sale.
Xstrata CEO Mick Davis commented, "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 as Xstrata's capital expenditure program ramps up."