South32 completes ‘milestone’ acquisition of 45% stake in Chilean copper mine

Australia’s South32 has completed the acquisition of a 45% stake in the Sierra Gorda copper mine in Chile from Japan’s Sumitomo Metal Mining and Sumitomo Corp, in a US$1.4 billion cash deal.

The deal, originally struck in October 2021, includes a contingent price-linked consideration of up to $500 million over the 2022 through 2025 fiscal years, and has been deemed ‘a major milestone by South32 chief executive Graham Kerr.

“By adding copper to our portfolio, along with our recent commitments to substantially increase our green aluminium production, we are making significant progress reshaping our portfolio for a low carbon future,” Kerr said.

South32’s maiden entry into Chile – the world’s largest copper producing nation – resembles its second largest deal since it was spun out from BHP in 2015. The ASX firm paid $1.3 billion in 2018 for 83% of Arizona Mining, which had a zinc, lead and silver project in the US.

The Perth-based company believes Sierra Gorda, which has a production capacity of about 150,000 tonnes of copper concentrate and 7,000 tonnes of molybdenum, will add between 70,000 and 80,000 tonnes of copper to its portfolio.

It also said the operation would immediately contribute to earnings and improve the company’s margins.

A feasibility study is underway for a brownfield oxide project assessing the opportunity to process material stockpiled at the mine. Potential also exists for further exploration upside at the Pampa Lina deposit and across the regional land package.