Feb 15 Sumitomo Metal Mining, Japan’s second-biggest copper producer, said on Monday it would raise its stake in southeast Arizona’s Morenci open-pit copper mine by buying 13 percent from majority owner Freeport-McMoRan for $1 billion.
The move comes at a time when copper prices are near six-and-a-half-year lows. Last November, the company’s President Yoshiaki Nakazato said it was looking to acquire stakes in copper and gold mines, taking advantage of its sound finances and a slump in commodity prices to sustain future growth.
The acquisition will take Sumitomo Metal’s share in Morenci to 25 percent from 12 percent, while Sumitomo Corp holds 3 percent, leaving Freeport with the rest.
Freeport said it expects to record a gain of about $550 million on the transaction and expects it to close in mid-2016.
Sumitomo Metal has a long-term goal to boost its annual copper output to 300,000 tonnes in the year to March 2022, up from a planned output of 170,000 tonnes in the current business year.
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