Mitsubishi grabs 30% of Mantoverde copper mine

Heap leaching process at Mantoverde. (Image courtesy of Queen's University.)

Japanese powerhouse Mitsubishi Materials Corporation (MMC) has acquired a 30% stake in Mantos Copper's Mantoverde mine and associated projects in Chile for $263 million.

MMC has actively been seeking to participate in high-quality copper projects to secure concentrate for its copper smelters as demand for the industrial metal is expected to soar in coming years because of its use in electric vehicles (EVs) and renewable technologies.

Mantos Copper, owned by a consortium led by British investment company Audley Capital Advisors and Orion Mine Finance Group, acquired Mantoverde and Mantos Blancos mines from Anglo American in 2015.

MMC has actively been seeking to participate in high-quality copper projects to secure concentrate for its copper smelters as demand for the industrial metal is expected to soar

The Mantoverde open pit mine, in the arid Atacama Desert,holds an estimated 2.1 million tonnes of copper reserves. Mantos Copper hasunveiled plans to build a concentrator and expand facilities, something that maynow come faster than expected thanks to Mitsubishi's involvement.

Last year, the company secured $250 million to fund the expansion of the sulphides concentrator at its Mantos Blancos operation, which will extend the life of the open-pit mine until 2035 and reduce costs.

The figure included a $150 million-loan from Glencore'ssubsidiary Altonorte. Another $50 million will come from a copper royaltyagreement with Anglo Pacific (LON, TSX: APY).

In the past four years, Japanese trading companies have beengrabbing assets and increasing their stakes on a few of them thanks to highercommodities prices, which have boosted their profits.

In 2018, Mitsui & Co. increased its interest in Chile's Collahuasi copper mine to11.03%. A few weeks later, Mitsubishi Corp upped its interest in Anglo American'sQuellaveco copper project in Peru by 21.9% for $600 million, takingits holding to 40%.

Sumitomo followed suite, buying a 30% interest in Teck Resources' (TSX: TECK.A | TECK.B)(NYSE: TCK) Quebrada Blanca Phase 2 project copper project, in northern Chile, for $1.2 billion.

Chile is the world's largest copper producer, meeting morethan 30% of global demand. The metal accounts for up to 15% of the country'sgross domestic product.