Codelco is purchasing Enami’s 10% stake in Teck Resources’ (TSX: TECK.A, TECK.B; NYSE: TECK) Quebrada Blanca mine in northern Chile for US$520 million.
The deal will contribute 25,000 to 30,000 tonnes of copper to Chilean state-run miner Codelco’s annual output and reduce Ecuadorian state-run Enami’s debt to US$250 million from US$740 million, the companies announced on Thursday.
“Our strategy of developing and strengthening the company through partnerships will enhance our position in the copper and lithium markets and, in turn, increase the value that Codelco contributes to the country,” Codelco chairman Máximo Pacheco said in a release. “It is very positive that an asset of this value remains in the hands of the state.”
Codelco plans to maintain the share rights previously held by Enami. These include preferential dividends, protection from dilution in future capital increases, and the ability to appoint two of the eleven board members.
10 billion tonnes
Enami valued its stake in Quebrada Blanca at US$323.8 million last year. The mine, 240 km southeast of the city of Iquique and 1,500 km from capital Santiago, has a resource of 10 billion tonnes grading 0.38% copper.
Located at an elevation of 4,400 metres, the mine began production in 1994 as an open-pit operation. Teck invested in 2007 and amassed majority ownership.
Teck is completing Quebrada Blanca’s second stage that should rank the mine among the world’s 20 leading copper producers and sixth in Chile.
It would follow BHP‘s (LSE: BHP; NYSE: BHP; ASX: BHP) Escondida, Anglo American (LSE: AAL) and Glencore‘s (LSE: GLEN) Collahuasi, Codelco’s El Teniente and Radomiro Tomic, and Antofagasta‘s (LSE: ANTO) Los Pelambres, based on their 2023 production.
On Thursday in Toronto, Teck A and B shares closed less than 1% lower at $60.27 and $60.41 apiece, respectively, valuing the company at $31.3 billion. Their respective 52-week trading ranges are $44.46 to $74.15; and $47.47 to $74.37.
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