Mitsubishi buys into Antamina copper-zinc project

Partners Rio Algom (ROM-T), Noranda (NOR-T) and Teck (TEK-T) have reached an agreement-in-principle with Mitsubishi whereby the Japanese giant will acquire a 10% stake in the Antamina copper-zinc-molybdenum project in Peru.

For about US$54 million, Mitsubishi will acquire a 10% equity interest in Compania Minera Antamina, the Peruvian company that is developing the US$2.3-billion Antamina project, now under construction north of Lima.

The purchase price consists of a base payment of US$13.8 million plus 10% of shareholder costs from July 10, 1998, until closing of the transaction, including interest.

The deal is subject to several conditions, including the settlement of definitive documentation (expected by mid-April) and the closing of US$1.3 billion of project financing.

Following the closing, expected this summer, Antamina’s remaining ownership will be reduced on a pro rata basis to 33.75% for each of Rio Algom and Noranda, and 22.5% for Teck.

Mitsubishi Materials and other Japanese smelters are expected to buy 200,000 tonnes of copper concentrates and 80,000 tonnes of zinc concentrates annually from the mine, which will produce an average of 600 million lbs. copper and 360 million lbs. zinc annually over a 20-year mine life beginning in late 2001.