Japanese group Mitsubishi has agreed to acquire an additional 21.9% equity stake in Anglo American Quellaveco (AAQSA), which is developing the Quellaveco copper mine project in Peru.
Image: Mitsubishi’s headquarters in Tokyo, Japan. Photo: Courtesy of Kakidai/Wikipedia.org.
AAQSA is a joint venture owned by Mitsubishi and Anglo American. With the latest stake acquisition, the total interest owned by Mitsubishi will now increase to 40%.
Mitsubishi will acquire the additional stake for a consideration of $500m. An additional contingent consideration of $100m will be made after two ore treatment expansions are achieved.
Once the transaction is closed, the Quellaveco copper mine project is expected to begin next month and copper production is slated for 2022.
The project development is estimated to cost between $5bn and $5.3bn. Mitsubishi will fund the equity on pro-rata portion of 40%.
Presently, copper constitutes one of the core areas of Mitsubishi’s resources business, with its current level of involvement in copper mining assets that have high resource volumes, quality and potential for expansion.
Quellaveco, which is claimed to be one of the world’s largest undeveloped copper deposits, contains nearly 7.5 million tonnes (content metal basis) of copper in Ore Reserves.
Mitsubishi said that the transaction is expected to increase its attributable copper production by nearly 120 thousand tonnes per year, which is equal to 50% of the company’s existing attributable copper production and will contribute to strengthening its copper investment portfolio.
The Japanese firm stated that the demand for copper across the world is expected remain steady, fueled by the development of power networks and other infrastructure in emerging countries and by growth in the global electric vehicle market cantered around China and Europe.
By developing Quellaveco copper mine project, the company aims to continue providing a stable supply of copper in the long term and in keeping with the need of the market. It also expects to fulfil the expectations of its shareholders and pursuit of sustainable growth, while simultaneously generating economic, social and environmental value.
Mitsubishi develops and operates businesses across virtually every industry, including industrial finance, energy, metals, machinery, chemicals, and daily living essentials.