SWITZERLAND and ONTARIO – After weeks of rumours, Glencore
looks to be on verge of creating a new base metals royalty company, and the company has attracted the Ontario Teachers’ Pension Plan
as a partner.
[caption id="attachment_1003720791" align="alignright" width="300"] Among Glencore’s operating mines is the Raglan copper project in northern Quebec. (Image: Glencore)
The new firm will be capitalized with US$700 million, about half of which will come from the Teachers’ plan. Glencore may arrange royalty agreement with about 10 mines.
Glencore will benefit from growing revenues as its buys up metals streams and resells the physical metals.
For the Teachers’ this could be the first time it has invested in base metals, and a sign that future prices will continue to strengthen.
Neither Glencore (www.Glencore.com
) nor the Ontario Teachers’ Pension Plan (www.OTPP.com
) had announced the deal on their websites at press time.