BHP plans to sell its Cerro Colorado copper mine in Chile to Melbourne-based equity firm EMR Capital for $US230 million ($311.4 million) in cash, $US40 million in proceeds and around $US50 million in contingent payments down the line, depending on copper performance.
BHP has been looking for a buyer for the mine, located in the Tarapacá region in the north of Chile, for over a year now as part of its business strategy to divest the smaller mines in its catalogue.
The $US320 million figure is significantly lower than a Deutsche Bank AG report released last year that valued the mine at up to $US800 million.
Jason Chang, chief executive officer of EMR, was pleased with the plans for the acquisition — currently subject to financing and closing conditions — which represents the latest addition in the company’s recent history of high-profile copper acquisitions, including the Lubambe mine in Zambia, purchased from Vale and African Rainbow, and the Golden Grove mine in Western Australia, formerly owned by MMG.
Chang said, “EMR has vast experience in owning and operating copper mines around the world and we look forward to adding Cerro Colorado to our portfolio as copper is one of our four core commodities and offers excellent demand and supply fundamentals for decades into the future.”
The sale is expected to close in the fourth quarter of 2018.