Coal miner Glencore will sell its CSA copper mine in Cobar, New South Wales, to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion).
CSA is an established, high-grade producing, long-life underground copper mine with an estimated current mine life of over 15 years, and MAC has identified opportunities to further extend it, subject to exploration success.
The sale is the latest indicator of copper’s growing importance, after Evolution Mining extended its Ernest Henry mine life to 2040 earlier this week.
Similarly, South32 is looking to grow its portfolio, identifying a copper mine that could be an M&A fit. The copper outlook continues to be supported by the rising decarbonisation narrative, with the commodity a highly efficient conduit for renewable energy systems such as solar, wind, hydro and thermal energy.
The Glencore/MAC deal has been on the table for some time now, with the companies entering into an agreement back in March 2022.
“The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realise the full potential value of the asset,” MAC chief executive officer Mick McMullen said at the time.
“We believe that copper has favourable fundamentals that will continue to support an elevated copper price.
“Copper is expected to play a key role in the global energy transition ‘megatrend’, with approximately one million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.
“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”
MAC will acquire 100 per cent of the issued share capital of Cobar Management from Glencore. Cobar Management owns and operates the mine.
The company has made arrangement for the copper streams with Osisko Gold Royalties in the US.
“CSA is a high-grade, long-life asset, with significant upside that can be unlocked by the MAC management team,” Osisko president and chief executive officer Sandeep Singh said.
“We are pleased to see this important transaction nearing completion, and look forward to having both the silver and copper streams contribute to our near-term cash flows.”