South32 has announced that it completed the acquisition of a 45% interest in the Sierra Gorda copper mine from Sumitomo Metal Mining and Sumitomo Corporation (collectively Sumitomo). The final purchase price includes a US$1.4B upfront cash payment plus a contingent price-linked consideration component of up to US$500M, payable at threshold copper production rates and prices in the years 2022-25. The upfront consideration was funded from cash on hand (~US$600M) and an acquisition debt facility (~US$800M).
South32 Chief Executive Officer, Graham Kerr said: “Our acquisition of an interest in the Sierra Gorda copper mine is a major milestone for South32. 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.
“Sierra Gorda will immediately contribute to earnings, improve Group operating margins and give South32 long-term exposure to a metal that is increasingly hard to discover, develop and produce. We believe copper will play a key role in the world’s decarbonisation and energy transition.”
South32 is a globally diversified mining and metals company. It produces commodities including bauxite, alumina, aluminium, metallurgical coal, manganese, nickel, silver, lead, zinc and copper from operations in Australia, Southern Africa and South America. With a focus on growing its base metals exposure, South32 also has two development options in North America and several partnerships with junior explorers around the world.