Mitsubishi Materials concludes copper participation agreement in Mantoverde, Chile

TOKYO (Reuters) – Japan’s Mitsubishi Materials Corp said on Friday it has completed the purchase of a 30% stake in Chile’s Mantoverde copper mine from Mantos Copper for $ 275 million, as the move to a low carbon economy stimulates demand for the metal.

FILE PHOTO: A monitor displaying the Mitsubishi Materials Corp logo is seen in Tokyo, Japan November 24, 2017. REUTERS / Toru Hanai

Japan’s third-largest copper smelter also said $ 520 million in project funding has been finalized.

In a separate statement, Mantos Copper said the deal was the biggest project finance achievement in the mining sector since the onset of COVID-19.

Demand for copper, which was priced at an eight-year high this week, is expected to skyrocket as the highly conductive metal is needed to transition to a low-carbon economy.

The $ 275 million investment includes a pro-rated portion of construction capital spending as well as working capital adjustments since last February, Mitsubishi said in a statement.

He announced his intention to buy the stake last year to obtain concentrate for his smelters.

The acquisition was subject to conditions, including a project finance agreement, which was reached with six banks on Friday, a spokesperson said, without identifying the lenders.

As part of the deal, Mitsubishi Materials agreed to provide a $ 60 million credit facility to cover potential cost overruns until project completion, which provides the company with additional copper concentrates. that it produces.

As a result, in addition to a right to draw on its 30% stake, Mitsubishi Materials expects to be entitled to about 42% of the project’s copper concentrate, he said.

The mine has 2.1 million tonnes of copper reserves and is owned by a consortium led by UK investment firm Audley Capital Advisors and Orion Mine Finance, which control Mantos Copper.

The partners plan to spend $ 784 million to expand the facilities and build a concentrator to extract and process the sulphide ore, with the goal of starting production in 2023.

The expansion will see Mantover produce an average of 110,000 tonnes of copper and 33,000 ounces of gold per year from 2023 to 2030, Mantos Copper said.

Reporting by Yuka Obayashi, additional reporting by Zandi Shabalala in London; edited by Jason Neely and Barbara Lewis

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