Teck Cominco Ltd. is the lead candidate to acquire the bulk of $7-billion (U.S.) worth of Falconbridge Ltd. assets that could be put up for sale by new owner Xstrata PLC, according to a mining analyst.

Teck is pegged as a possible buyer for six out of nine Falconbridge mining projects or properties identified by Desjardins Securities John Hughes as assets that Xstrata may sell to help fund the $18-billion (Canadian) takeover.

"Xstrata's ultimate financing strategy, we would assume, includes the sale of some Falconbridge assets," Mr. Hughes said in an interview yesterday.

"[Xstrata chief executive officer] Mick Davis is not one to waste time," he noted, expecting the Anglo-Swiss miner to quickly auction off assets it deems as non-core to take advantage of a booming commodities cycle.
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"These are very buoyant markets on price that would certainly allow for an easier sale of these assets," he said.

In the wake of its failed attempt to take over Inco Ltd., Teck CEO Don Lindsay said his company has several smaller mining acquisitions in mind and the financial strength to get them done. The Vancouver company had $3.6-billion in cash on hand at the end of June.

"If any mining assets were to become available, we would certainly have a look," Teck spokesman Greg Waller said yesterday. He declined to comment on Teck's interest in any specific Falconbridge assets.

Mr. Hughes thinks Teck is the "natural buyer" for Falconbridge's 50-per-cent stake in the Lennard Shelf zinc project in Australia because it already owns the other half, valued at about $200-million (U.S.).

As well, Mr. Hughes said Teck would likely be interested in Falconbridge's holdings in the Antamina copper and zinc mine in Peru. Teck currently owns 22.5 per cent of the producing property and would gain majority control if Xstrata were to sell it Falconbridge's one-third stake in a deal that Mr. Hughes said could be worth up to $1.2-billion.

Diversifying into nickel is a key strategic pillar for Teck and was at the centre of the zinc giant's quest for Inco. That is why Mr. Hughes believes Teck is a possible buyer for Falconbridge's 49-per-cent stake in the Koniambo nickel project in New Caledonia. The fact that Xstrata doesn't have control of the development project could also prompt a sale that could net up to $2-billion, the analyst said.

"They are very aggressive in maintaining a control operator position and majority interest," Mr. Hughes said.

"The trigger for a potential sale is the fact that they have a minority position."

An Xstrata spokesman did not return calls yesterday.