World’s No.1 miner BHP (ASX:BHP) is said to have agreed selling its Cerro Colorado mine, its smallest Chilean copper operation, to EMR Capital Advisors Pty, an Australian private equity firm that invests in natural resources.
The Melbourne-based mining giant is supposed to announce the deal as early as Tuesday, according to unanimous sources with knowledge of the matter quoted by Bloomberg.
BHP decided to offload its Cerro Colorado mine in May last year, as part of chief executive Andrew Mackenzie’s bid to focus on large assets in commodities such as iron ore, copper and oil.
Cerro Colorado runs out of ore in 2023, but BHP has said the asset has options to expand its lifespan for decades.
Only three months after the official statement, BHP said the sale was in its final stages, but more than a year later no announcements have been made.
Cerro Colorado, which is expected to fetch at least $800 million, runs out of ore in 2023, the same year its environmental licence expires.
The operation, located in Chile’s far north, produced about 65,000 tonnes of copper in the year to June 2017. BHP’s flagship mine Escondida, located in the same country, yields more than 10 times that amount annually.
The asset has options that could potentially expand its lifespan for decades, but analysts agree it makes more sense for another owner to take it over and put in the work to extend its life, as BHP focuses only on major operations across its key commodities.
EMR is not foreign to mining. Last year, it bought the Lubambe copper mine in Zambia and in March partnered with Indonesia’s PT Adaro Energy on a $2.3 billion deal for Rio Tinto’s Kestrel coal operation in Australia.
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From:: Infomine