Teck sells stake in Chile copper project to Sumitomo for $1.2 bln
(Adds details, background)
LONDON, Dec 4 (Reuters) - Canadian mining company Teck
Resources Ltd said on Tuesday it has agreed
to sell a 30 percent stake in its Quebrada Blanca copper mine
expansion in northern Chile to Japan's Sumitomo for $1.2
Sumitomo Metal Mining and Sumitomo Corporation
will pay an $800 million earn-in contribution and $400
million matching contribution, below the $2 billion mark Teck
had targeted to help develop the second phase of the mine.
Once the deal is completed, Teck will own 60 percent of the
Quebrada Blanca project and Chilean state agency ENAMI will hold
the remaining 10 percent.
The expansion plan, known as QB2, won regulatory approval in
August. It is expected to extend the ageing deposit's life by 25
years and substantially boost production to 300,000 tonnes of
copper annually from 23,400 tonnes in 2017.
"This partnership significantly de-risks Teck's investment
in the project, enhances our project economics and preserves our
ability to continue to return capital to shareholders and reduce
bonds currently outstanding," Teck's Chief Executive Don Lindsay
said in a statement.
Sumitomo, which was advised by Canadian investment bank
Royal Bank of Canada (RBC) on the deal, had competed with
Mitsubishi Corp and Rio Tinto among
others, as these look to boost their copper assets.
The metal is viewed in the industry as having one of the
brightest outlooks, as existing reserves are dwindling and
copper is likely to be in strong demand for use in electric
(Reporting by Clara Denina; Additional reporting by Yuka
Obayashi in Tokyo
Editing by Susan Fenton)
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.