Exclusive: JPMorgan poised to sell U.S. metal concentrate unit

Fri Apr 20, 2012 6:31pm EDT
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By Josephine Mason

SANTIAGO (Reuters) - JPMorgan Chase & Co (JPM.N: Quote) is close to selling its U.S. metal concentrates trading arm and could announce a deal as early as Monday, two sources who were informed of the deal told Reuters this week.

The divestment, while likely small in dollar terms, would come just months ahead of a deadline to sell off parts of the bank's enlarged commodity trading operation that do not meet Federal Reserve regulations. JP Morgan had two years to comply after it bought the bulk of RBS Sempra in 2010.

The size of the deal and identify of the buyer were not clear, but sources said most large merchant traders had examined the Stamford, Connecticut-based business, a mid-sized player in the niche market for trading concentrate ore that has been crushed and milled to remove waste and increase the metal.

Philip Bacon, who runs JPMorgan Metal & Concentrate LLC, told customers and traders at this week's CESCO copper industry conference in Santiago, Chile, that they hoped to announce a deal by Monday, two sources who met with the team told Reuters.

A JP Morgan spokeswoman declined to comment.

The concentrates team, which includes a handful of senior traders, had to miss Wednesday night's CESCO dinner, one of the metal and mining industry's biggest events of the year, to fly back to the United States to finalize the last remaining details of the deal, the sources said.

The announcement could yet slip a few days, but the team expects to inform customers by the end of next week, they said. The sale does not including the bank's physical copper and aluminum trading desks in Singapore and London and its much-larger metal futures trading and brokerage operations, which includes its London Metal Exchange ringdealing membership.

The unit trades copper, zinc and lead concentrates, as well as physical base metals, mainly copper and aluminum. The base metal book is run by Brian Ahern, they said.   Continued...

A sign is seen outside the JPMorgan office in Los Angeles, California, October 12, 2010. REUTERS/Lucy Nicholson