Japanese powerhouse Mitsubishi Materials has acquired a 30% stake in Mantos Copper’s Mantoverde mine and associated project in Chile for $263 million.
The move, the latest expansion by Japan’s third-biggest
copper smelter into the South American market, seeks securing supply of
concentrates, as demand for the industrial metal is expected to soar in coming
years because of its use in electric vehicles (EVs) and the next generation of
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.
The Mantoverde open pit mine, in the arid Atacama Desert,
holds an estimated 2.1 million tonnes of copper reserves. Mantos Copper has
unveiled plans to build a concentrator and expand facilities, something that may
now 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’s
subsidiary Altonorte. Another $50 million will come from a copper royalty
agreement with Anglo Pacific (LON, TSX: APY).
In the past four years, Japanese trading companies have been
grabbing assets and increasing their stakes on a few of them thanks to higher
commodities prices, which have boosted their profits.
In 2018, Mitsui & Co. increased its interest in Chile’s Collahuasi copper mine to
11.03%. A few weeks later, Mitsubishi Corp upped its interest in Anglo American’s
Quellaveco copper project in Peru by 21.9% for $600 million, taking
its 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 more
than 30% of global demand. The metal accounts for up to 15% of the country’s
gross domestic product.