South32 acquires 45% of the Chilean Sierra Gorda copper mine from Sumitomo for $1.55 billion
(Kitco News) - South32 announced Thursday that it has entered into two binding conditional agreements with Sumitomo Metal Mining and Sumitomo Corporation (collectively Sumitomo) to acquire a 45% interest in the Sierra Gorda copper mine, Chile, for an upfront cash consideration of US$1.55 billion.
According to a press-release, Sierra Gorda is an operating mine in the prolific Antofagasta copper mining region, which is expected to produce 180kt of copper, 5kt of molybdenum, 54koz of gold and 1.6Moz of silver in 2021 (100% basis).
The acquisition provides South32 with joint control alongside 55% joint venture partner KGHM Polska Miedz (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 for South32.
"We are actively reshaping our portfolio for a low carbon world and the acquisition of an interest in Sierra Gorda will increase our exposure to the commodities important to that transition. Copper is a critical metal in the decarbonization of the world's energy networks and has strong long-term market fundamentals," Graham said.
"Adding Sierra Gorda further improves our portfolio and is expected to immediately lift Group margins and earnings, supporting future shareholder returns while retaining strength and flexibility in our Balance Sheet," he added.
South32 is a globally diversified mining and metals company producing bauxite, alumina, aluminium, metallurgical coal, manganese, nickel, silver, lead and zinc in Australia, Southern Africa and South America.