A Japanese consortium will buy a 12% equity interest in the Collahuasi copper project from joint owners Falconbridge (TSE) and Luxembourg-based Minorco.
The consortium, which includes Mitsui & Co., Nippon Mining & Metals Co. and Mitsui Mining & Smelting Co., will also enter into a long-term contract to buy from Collahuasi 250,000 tonnes of copper concentrate annually.
In addition, the companies will enter into a loan agreement whereby customers will be allowed a line of credit of up to US$200 million.
The price paid for the 12% interest in Collahuasi is based on the price paid by Falconbridge and Minorco for the one-third interest they purchased from Shell last May. It also includes project expenses incurred since the purchase transaction, interest expenses and a US$6.8-million premium paid in consideration for entering into the long-term contract.
All the transactions are subject to regulatory and corporate approvals, as well as due diligence. The deal is expected to close in mid-1996.
Located in northern Chile, Collahuasi has a geological resource of 3.1 billion tonnes averaging 0.82% copper at a cutoff grade of 0.4%. For the first six years, Collahuasi is expected to yield 330,000 tonnes of copper-in-concentrate from 145 million tonnes of secondary, enriched resources averaging 1.79% copper. In addition, 50,000 tonnes of copper cathode will be produced from 53 million tonnes of acid-leachable resources averaging 1.31% copper.
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