Glencore has completed the previously announced $1.1bn sale of its Cobar copper mine located in New South Wales, Australia to Metals Acquisition (MAC).

Cobar is a producing, long-life, underground copper mine located in the Tier 1 mining jurisdiction of western New South Wales. The mine has been in operation since 1967.

According to the terms of the deal, Glencore has received $775m in cash and $100m worth of shares of MAC.

Following the completion of the deal, the Switzerland-based mining company owns a 20.6% stake in MAC. The latter will assume ownership and full operational control of the copper mine.

The transaction consists of a deferred payment of $75m which is to be paid within 12 months.

It also involves a 1.5% life of mine net smelter return royalty as well as a contingent payment of $150m which depends upon future copper prices.

Besides, Glencore will maintain the offtake for the entire copper concentrate produced at the Cobar copper mine.

MAC CEO Mick McMullen said: “I want to thank the large group of investors that supported our recent PIPE totaling USD$230 million, our other funding partners, our advisors who have worked resolutely, as well as Glencore for working steadfastly with us throughout the entirety of our transaction.

“Today is truly an exciting moment for all of us at Metals Acquisition Limited, the new owner and operator of this historic asset. We look forward to working with the CSA Mine team to make this into a great foundational asset for MAC.”

The definitive sale and purchase agreement between the companies for the Cobar mine was signed in March 2022.

In November 2022, both companies amended the terms of the agreement to enable Glencore to receive $775m in cash with the potential to scale up to $875m depending on the demand for private investment in public equity (PIPE).

According to Glencore, the divestiture of its Cobar mine is in line with the company’s strategy of simplifying and aligning its global portfolio to focus on lower-cost and long-life assets.