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Glencore is considering selling its stake in the Kazakh mining company Kazzinc amid interest from potential buyers in China, according to sources familiar with the matter. The deal could value Glencore’s nearly 70% holding in Kazzinc at several billion dollars, the sources said, requesting anonymity due to the private nature of the discussions.

Glencore is also in the process of selling the Kazzinc-operated Vasilkovskoye gold mine, having scrapped a previous sale over seven years ago. The gold mine and Kazzinc’s core zinc operations could be sold to separate buyers or a single party, depending on the offers received. However, the deliberations are preliminary and may not lead to a transaction. A representative for Glencore declined to comment.

Kazzinc is composed of an extensive network of mines, concentrators, and metal finishing plants across Kazakhstan, enabling the company to process ore and produce finished zinc metal and products. The company was established in 1997 through the merger of three main non-ferrous metals companies in eastern Kazakhstan, which were mostly government-owned.

Glencore CEO Gary Nagle has continued his predecessor’s strategy of simplifying the business by selling off smaller or more challenging assets. The company has already sold zinc assets in Peru and some of its smaller copper operations. Zinc prices have rallied this year due to supply constraints, but the long-term outlook remains uncertain because of the metal’s heavy exposure to the struggling construction sector and its limited uses in fast-growing industries like renewable energy and electric vehicles.

Prices were 1.6% lower at $2,888.00 on Wednesday on the London Metal Exchange, reducing zinc’s yearly gain to 8.6%. Kazzinc’s zinc production rose by 27,500 tons in 2023 to 173,900 tons, while lead production totaled 35,600 tons, copper was 14,800 tons, and gold reached 598,000 ounces, according to Glencore’s annual report.