Mumbai: Vedanta Resources flagship company Sterlite Industries (India) Ltd is a step closer to acquiring bankrupt copper miner Asarco after a judge at a US bankruptcy court asked the creditors to vote on competing plans.

Sterlite Industries, a subsidiary of London-listed mining group Vedanta Resources Plc, had in May agreed to acquire Tuscan, US-based smelting and refining company Ascaro for $2.6 billion in cash.

Sterlite claims to have the support of majority of creditors as Asarco's estranged parent Grupo Mexico took away its lucrative mines and incorporated them with the latter's subsidiary, putting Asarco in trouble.

Asarco, formerly known as American Smelting and Refining Company, is an over 100 year old company and is currently the third largest copper producer in the US. It produced 235,000 tonnes of refined copper in 2007. Asarco's mines currently have estimated reserves of approximately 5 million tonnes of contained copper.

For the year ended 31 December 2007, Asarco had total revenues of approximately $1.9 billion.

Sterlite plans to finance the acquisition through a mix of debt and own cash
resources.

The integrated assets to be acquired include three open-pit copper mines and a copper smelter in Arizona, US and a copper refinery, rod and cake plant and precious metals plant in Texas, US, Sterlite had said in an earlier press release.

The acquisition is on a cash-free and debt-free basis. Sterlite will assume operating liabilities but not legacy liabilities for asbestos and environmental claims for ceased operations.

The acquisition is in line with Sterlite's stated strategy of leveraging its own established skills, said Anil Agarwal, chairman, Sterlite.

The sale will achieve the overall best value for Asarco, its employees, creditors and the local communities in which we operate by successfully emerging from Chapter 11, said Asarco's president and chief executive Joseph F Lapinsky.

Sterlite will leverage its operational and project skills to develop and optimise Asarco's mines and plants, access its attractive mining assets with long life and gain geographic diversification in the North American market through the stable operating and financial platform for Asarco.

Judge Richard S Schmidt of the US Bankruptcy Court at Corpus Christi in Texas, recently approved the acquisition plans filed by the companies and told the creditors of Asarco to select the right owner. After the voting, the judge will make a final ruling taking into account the creditors' opinion.

''The union in Asarco, United Steelworkers, and the legislators have already communicated to the creditors for extending the support to Sterlite, keeping Grupo away from taking over the company. Union officials also threatened that they would leave their jobs if Grupo is reinstated at the helm,'' the sources said.

When Asarco filed for bankruptcy in 2005, the court and a creditors committee assumed control of the company, which Grupo Mexico bought in 1999. Labour disputes led to a four-month strike and it ended after Asarco filed for bankruptcy protection.

Asarco, however, had posted a profit of about $1.9 billion last year.

On May 31, Sterlite emerged as the lead bidder with $2.6 billion for buying Asarco's operating assets. But Grupo, which has vowed to fight the Sterlite's Asarco had proposed a $4.1 billion revival package.

Under the proposal, the company would put up $2.7 billion, use $1 billion, which Asarco has on hand, and then put in a further $440 million, if needed. Grupo's offer is about $100 million higher than Sterlite's offer.