The Canada-based base metals mining company will also have the right to acquire an additional stake of up to 19% in the Caserones mine for $350m over a period of five years, beginning on the first anniversary of the closing date
Lundin Mining agrees to buy 51% stake in the Caserones copper mine in Chile. (Credit: JX Nippon Mining & Metals Corporation)
Lundin Mining has agreed to acquire a stake of 51% in SCM Minera Lumina Copper Chile (Lumina Copper), the operator of the Caserones copper mine in Chile, for $950m.
In this connection, the Canada-based base metals mining company signed a binding purchase agreement with JX Nippon Mining & Metals, which is the 100% shareholder of Lumina Copper.
As per the terms of the deal, Lundin Mining will pay JX Nippon an upfront cash consideration of $800m. The remaining amount of $150m will be in the form of deferred instalments to be paid over a period of six years following the closing date of the deal.
Besides, Lundin Mining will have the right to buy an additional stake of up to 19% in the Caserones copper mine for $350m. This will be over a period of five years, which will begin on the first anniversary of the closing date of the deal.
Located in the Atacama region of the northern Chilean Andean Cordillera, the porphyry copper-molybdenum deposit is part of the Vicuña copper district.
The Caserones copper-molybdenum project comprises a traditional open pit mine, a conventional sulphide flotation plant, and copper cathode from a dump leach, solvent extraction and electrowinning plant.
The first copper cathode at the Chilean mine was produced in 2013. The following year saw the first production of copper and molybdenum concentrates.
Lundin Mining CEO Peter Rockandel said: “Upon closing of the Acquisition of Caserones, we add another long-life copper mine of material size and with significant growth potential to our portfolio, in a region in which we have considerable knowledge and experience.
“The Caserones team has achieved meaningful operational improvements in recent years, and we will work to unlock additional upside through our strong technical resources and existing presence in the region.
“The initial controlling interest increases our exposure to what we believe is a growing top-tier copper mining district. We retain the option to further increase our ownership over the next few years at an attractive price.”
For JX Nippon, the sale of stake is part of its strategy to proactively review its asset portfolio. The Japanese group’s review is aimed at transforming from a process industry-type company to a technology-based firm and becoming a global player which contributes with advanced materials.
JX Nippon stated: “Through the participation of Lundin, which has extensive knowledge and high mine operation capability, as a partner in the operation of the Caserones Copper Mine, improvement of the mine’s productivity and cost competitiveness can be expected.
“In addition, as Lundin has a lot of operating experiences in the region, this transaction would bring big regional opportunity of mining development.”
The transaction, which is subject to customary conditions such as third-party and the necessary regulatory approvals, is expected to close in Q3 or Q4 2023.