Third time lucky for Glencore as it announces CSA copper mine divestment

Metals Acquisition Corp is set to acquire the CSA copper mine in Australia after Glencore accepted a US$1.1 billion offer from the blank-check firm.

Glencore had a deal in place with Perth-based IGO Ltd for the high-grade copper mine, located in New South Wales, however the miner dropped out of exclusive deal talks in February. Prior to that, Australian copper producer Aeris Resources made a $575 million offer for the asset in 2019.

Since then, copper prices have surged dramatically on tight supplies and strong demand from electric vehicle makers. Investors expect copper usage to continue rising as companies and countries begin transitioning to a low carbon economy.

“Copper is expected to play a key role in the global energy transition ‘megatrend’,” Metals Acquisition chief executive Mick McMullen said following the announcement.

Metals Acquisition Corp is a shell company that plans to fund the deal with the $250 million it raised in its IPO on the NYSE, along with debt financing. The firm will also hand $50 million worth of its shares to Glencore, and the commodities trader will receive royalties beyond the purchase price.

The sale of the CSA mine is consistent with Glencore’s strategy of simplifying its global portfolio of over 150 operating sites to focus on lower-cost, long-life assets, the miner said.