Metals and mining company BHP Billiton has reached an agreement to divest its Cerro Colorado copper mine in Chile to private equity firm EMR Capital, in a deal valued at around $320m.

As per the deal, EMR Capital will make an upfront payment of $230m to BHP upon closure of the transaction, subject to financing and customary closing conditions. The deal is expected to be completed by the fourth quarter of this year.

BHP will also receive around $40m in proceeds from the disposition of certain Cerro Colorado copper inventory and an additional payment of up to $50m at a later stage, depending on the price of copper.

“We look forward to adding Cerro Colorado to our portfolio as copper is one of our four core commodities.”

Located in the Atacama Desert in northern Chile, the Cerro Colorado mine is one of two copper mining projects operated by the Anglo-Australian miner in the Pampa Norte division.

Last year, copper cathode production from the Cerro Colorado mine stood at 65,000t, while production for the previous year was 77,000t.

EMR Capital CEO Jason Chang said: “EMR has vast experience in owning and operating copper mines around the world and we look forward to adding Cerro Colorado to our portfolio as copper is one of our four core commodities and offers excellent demand and supply fundamentals for decades into the future.”

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The mine was also valued at up to $800m last year and its environmental licence is valid until 2023.

BHP’s other copper assets in Chile include Escondida and Spence.