Metals Acquisition Corp. acquires CSA copper mine for $1.1 billion

March 17, 2022

Metals Acquisition Corp. has acquired Glencore’s CSA copper mine in Australia in a $1.1 billion deal.

The company became the top contender in the years-long race for the mine after after Perth-based IGO Ltd. dropped out of exclusive deal talks in February. The mine is one of the highest-grade resources in Australia.

Reuters reported that the purchase gives Metals Acquisition Corp. the access to a mine that is expected to produce between 41 kt/a (45,000 stpy) and 49,000 kt/a (54,000 stpy) of copper.

Strong demand and a supply deficit sent copper's prices soaring more than 25 percent prices last year and investors have said the trend was likely to continue as more companies join the fight against climate change.

For UK-based Glencore, the sale advances a streamlining of its business. The owner of more than 150 operating sites across the globe has put 27 assets for review, 14 of which would be sold.

JP Morgan analysts said the commodities trader and miner had received an attractive price for the mine, citing the $150 million the asset was expected to contribute to core earnings in 2022.

Metals Acquisition will pay most of the deal value in cash and hand $50 million worth of its shares to Glencore. The miner will also receive royalties beyond the purchase price.

The blank-check firm plans to fund the deal with debt and the $250 million it raised in its initial public offering, among others.

Blank-check firms are shell companies that raise money through an IPO to either purchase a private company or assets.
 

 

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