Copper Producer Would Pay $120 Million For Remaining 25% Stake
Grupo Mexico, one of the world's largest copper producers, is nearing a deal to acquire Mitsui 8031.TO -0.30% & Co.'s 25% stake in the Silver Bell copper mine in Arizona for about $120 million, according to people familiar with the matter.
The deal, if it proceeds, would give Grupo Mexico sole ownership of the mine, allowing it to take full advantage of Silver Bell's output at a time when copper prices are up about 11% from their March lows amid signs of strengthening demand for the widely used industrial metal.
Grupo Mexico hasn't signed a deal yet, but it has told Mitsui it would exercise its right of first refusal to purchase the stake, one of the people familiar with the matter said.
Representatives for Grupo Mexico and Mitsui couldn't immediately be reached for comment.
Silver Bell, located in Marana, Arizona, produces about 46 million pounds of copper annually, according to the latest available figures. Grupo Mexico's ASARCO unit owns 75% of the mine and Mitsui, a large Japanese trading company, owns the remaining 25%. ASARCO operates three copper mines in Arizona, producing a combined 350 million to 400 million pounds of copper a year.
The potential deal between Grupo Mexico and Mitsui could signal an increase in deal activity in the mining sector after a long lull, and comes as some miners look to shed noncore assets to pay down debt.
The Wall Street Journal reported earlier this month that Freeport-McMoRan Inc. as looking for buyers for its Candelaria copper mine in Chile and that well-known mining executives such as Tye Burt and Aaron Regent, the former heads of Kinross Gold Corp.and Barrick Gold Corp.,respectively, were scouting for acquisitions in the mining sector.
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