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Monday 26 September 2016

Glencore weighs up sale of Limerick mine Pallas Green

Published 13/09/2015 | 02:30

Commodities giant Glencore is considering selling its Limerick zinc mine, Pallas Green
Commodities giant Glencore is considering selling its Limerick zinc mine, Pallas Green

Commodities giant Glencore is considering selling its Limerick zinc mine, Pallas Green. Ireland's most promising undeveloped zinc mine is one of several Glencore assets on the chopping board as billionaire Ivan Glasenberg's firm seeks to raise cash quickly to avoid a ratings cut.

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The company's balance sheet is bulging under a $30bn (€26.4bn) debt pile. It has pledged to cut borrowings by a third to protect its BBB rating at Standard & Poor's. A company spokesperson confirmed Pallas Green was part of a strategic review of the group's assets aimed at cutting debt.

Pallas Green is only at exploration stage and significant work is needed to develop it to the point of commercialisation. The previous owner, Xstrata, forecast that it would take a €230m investment to bring it into production by 2017. If developed, Pallas Green could be the country's second-largest mine ever after Tara Mines in Co Meath.

Pallas Green contains up to 42 million tonnes of ore, according to Glencore's last assessment. But the asset is more difficult to develop than Tara Mines because the ore is broken into a large number of pockets at different depths.

The mine has changed hands several times over the past two decades. It started life as a joint venture between Irish exploration company Minco and Canadian mining company Noranda before being bought by Swiss group Xstrata and coming under Glencore's control when it merged with Xstrata in 2013.

Minco sold a 23.6pc stake in Pallas Green for a reported €15m in 2011, giving the asset a valuation of about €65m. However, an industry source said it is worth significantly less than this today.

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