South32 acquires 45% of the Chilean Sierra Gorda copper mine from Sumitomo for $1.55 billion
(Kitco News) - South32 announced Thursdaythat it has entered into two binding conditional agreements with Sumitomo MetalMining and Sumitomo Corporation (collectively Sumitomo) to acquire a 45%interest in the Sierra Gorda copper mine, Chile, for an upfront cashconsideration of US$1.55 billion.
According to a press-release,Sierra Gorda is an operating mine in the prolific Antofagasta copper miningregion, which is expected to produce 180kt of copper, 5kt of molybdenum, 54kozof gold and 1.6Moz of silver in 2021 (100% basis).
The acquisition providesSouth32 with joint control alongside 55% joint venture partner KGHM PolskaMiedz (KGHM), a global miner listed in Poland, the company said in a statement.
In making the announcement,CEO Graham Kerr said the acquisition was another transformative step forSouth32.
"We are activelyreshaping our portfolio for a low carbon world and the acquisition of aninterest in Sierra Gorda will increase our exposure to the commodities importantto that transition. Copper is a critical metal in the decarbonization of the world'senergy networks and has strong long-term market fundamentals," Graham said.
"Adding Sierra Gorda furtherimproves our portfolio and is expected to immediately lift Group margins andearnings, supporting future shareholder returns while retaining strength andflexibility in our Balance Sheet," he added.
South32 is a globallydiversified mining and metals company producing bauxite, alumina, aluminium,metallurgical coal, manganese, nickel, silver, lead and zinc in Australia,Southern Africa and South America.
By Vladimir BasovFor Kitco News
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