Marubeni to acquire 30-per cent stake in Antofagasta's Chilean mining projects

26 April 2008

Diversified industrial trading group Marubeni Corporation  will acquire a 30-per cent stake in leading copper producers Antofagasta Plc to acquire a 30-per cent stake in two of its Esperanza and El Tesoro mining projects for $1.31 billion. Marubeni will also invest $600 million of the estimated $1.9 billion required to develop of the Esperanza project of approximately $0.6 billion, which are currently estimated at approximately  $1.9 billion. Marubeni is therefore, will be investing a total of approximately  $1.9 billion for the Projects.

 The total reserves and resources of the thwo mininng projects are estimated to exceed 1,900 million tonnes. Esperanza is expected to produce 700,000 tonnes of concentrates annually, containing 200,000 tonnes of payable copper. Of this, Marubeni is entitled to sell 210,000 tonnes of concentrates amounting to 5 per cent of Japanese copper imports. El Tesoro currently produces 90,000 tonnes of payable copper each year.

Through this investment, Marubeni expects to secure its markets for Japanese copper imports. Marubeni expects to finance the acquisition from the Japan Bank for International Cooperation and Japan Oil, Gas and Metals National Corporation.

Chile accounts for over one third of the world's copper production and is the largest copper producing country in the world with a number of large-scale copper deposits, a history of successful copper mining, and is recognised as a low-risk country for mining investments. The Esperanza and El Tesoro mining projectsare located in Sierra Gorda in Chile, a key area of focus for Antofagasta.

The area has estimated combined mineral resources of approximately 3 billion tonnes, is an exisiting copper producing area, and its dry climate makes it suitable for mining.   With the planned development of a single mining complex to process both sulphide and oxide ores from the two projects, the area has strong potential for further mining developments. 

The Esperanza project is one of the few high-profile development copper projects remaining globally, and is expected to start the production of copper concentrates, which contains payable copper, by end-2010. Esperanza has proven & probable copper reserves of 480 million tonnes and expected average annual production of 700,000 tonnes of concentrates containing 195,000 tonnes of payable copper, 229,000 ounces of payable gold and 1,556,000 ounces of payable silver over the first ten years. Its operating cost competitiveness is favorable when measured against other copper mining projects currently in development.