Glencore Xstrata has agreed to sell its entire stake in the Las Bambas copper mine project in Peru to an MMG-led consortium for around $5.85bn.

MMG Limited, a subsidiary of China Minmetals, leads the consortium with a 62.5% stake. GUOXIN International Investment has a 22.5% stake, while CITIC Metal owns a 15% interest.

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Apart from the $5.85bn price tag, the consortium has also agreed to cover all costs of developing the mine between the start of this year and the formal closing of the transaction, which is expected to take place by the third quarter of 2014.

Glencore said that so far the capital expenditure and other costs amounted to $400m in the first quarter of 2014.

Glencore Xstrata CEO Ivan Glasenberg said that since the company acquired Xstrata in May 2013, it has taken decisive steps to de-risk Las Bambas.

"Our willingness to sell reflects the level of the offer and our conviction that we can utilise the sale proceeds to create additional shareholder value," Glasenberg added.

MMG chief executive officer Andrew Michelmore said the acquisition is consistent with China Minmetals’ vision for MMG as its international investment platform for base metals projects.

"Our willingness to sell reflects the level of the offer and our conviction that we can utilise the sale proceeds to create additional shareholder value."

"The addition of Las Bambas to MMG’s international portfolio delivers on our growth strategy and vision – to build a global diversified minerals and metals company and create opportunities for all stakeholders – including our shareholders, employees and communities," said Michelmore.

Located in the Cotabambas, Apurimac region of Peru, Las Bambas is a long-life copper development project with prospective exploration options.

The project is at an advanced stage of construction and is expected to start production in 2015.

It has a 6.9 million tonne copper ore reserve and 10.5 million tonne copper mineral resource.

Las Bambas is anticipated to produce more than 2 million tonnes of copper in concentrate in its first five years of operation.