The logo of Glencore is pictured in front of the company's headquarters in the Swiss town of Baar

Natural resource giant Glencore Xstrata has agreed to sell its entire interest in the Las Bambas copper mine in Peru to a Chinese consortium, completing a condition set by Chinese authorities to approve the mammoth merger between Glencore and Xstrata.

The Chinese consortium led by MMG will pay $5.85bn (£3.5bn, €4.2bn) in cash to the commodities trader as consideration. Other members in the consortium are GUOXIN International Investment Corporation and CITIC Metal Company.

In addition, all capital expenditure and other costs incurred in developing Las Bambas in the period from 1 January, 2014 to closing of the sale will be payable by the consortium.

As at the end of March, the company's total capital expenditure and other costs incurred for the mine since the start of 2014 totalled $400m.

"Since we acquired Xstrata on 2nd May 2013, our team has taken decisive steps to de-risk Las Bambas, which has culminated in this compelling offer from the Consortium," Glencore CEO Ivan Glasenberg said in a statement.

"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 company said it would use the proceeds for further investment opportunities, adding that it would return any surplus capital to shareholders.

The transaction is subject to approvals by the China Ministry of Commerce and MMG shareholders. The transaction is supported by China Minmetals Non-Ferrous Metals Company, which holds about 74% of the share capital of Hong Kong-listed MMG.

The sale of Las Bambas was required to secure approval from China's competition authorities for Glencore's takeover of Anglo-Swiss miner Xstrata.

Ever since the mine was put on sale, analysts have been expecting a Chinese buyer for the asset due to the high demand for copper in the country. China is already the largest consumer of copper in the world.

Las Bambas is scheduled to start production in 2015. It is expected to produce more than 450,000 tonnes of copper per year in its first five years of production and 300,000 tonnes per year thereafter.