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South32 completes acquisition of 45% interest in Sierra Gorda

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Global Mining Review,

South32 Ltd has completed the acquisition of a 45% interest in the Sierra Gorda copper mine from Sumitomo Metal Mining and Sumitomo Corp. (collectively Sumitomo). The final purchase price includes a US$1.4 billion upfront cash payment, plus a contingent price-linked consideration component of up to US$500 million, payable at threshold copper production rates and prices in the years 2022 – 2025. The upfront consideration was funded from cash on hand (~US$600 million) and an acquisition debt facility (~US$800 million).

South32 CEO, 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.”

Production, operating unit costs and capital expenditure guidance for South32’s interest in Sierra Gorda over the remainder of FY22 from completion is included in the table below. FY23 guidance will be provided with the FY22 financial results.

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Copper mining news South American mining news