Australia-based MMG is a step closer to completing the acquisition process of Las Bambas copper mine in Peru, with all its shareholders giving their consent to the $5.8bn deal.
During a meeting held in Hong Kong on 21 July, MMG’s shareholders have approved the proposed mine acquisition from Glencore Xstrata, which is expected to be transformational for the company.
MMG chief executive officer Andrew Michelmore said: "Once completed, this transaction will mark a significant milestone in our company’s history."
The company has also obtained an independent shareholder approval, which would allow it to continue with a life of mine offtake agreement, for around 57.31% of the copper concentrate produced at the mine, along with its major shareholder China Minmetals.
"With an offtake agreement in place, MMG has secured a long-term customer for Las Bambas copper concentrate," Michelmore added.
"This arrangement will maximise shareholder returns by reducing the company’s exposure to demand fluctuations while maintaining exposure to market price."
The company will use both debt and equity contributions made by its joint venture (JV) partners in order to fund the proposed acquisition.
With a 62.5% stake, MMG is the lead company of the JV. The other partners, comprising a subsidiary of Guoxin International Investment and CITIC Metal, own 22.5% and 15% stakes respectively.
With more than 10.5 million tonnes of copper resources, the company is in an advanced phase of construction and is scheduled to commence operations in 2015.
Las Bambas is expected to produce around 400,000t of copper a year during its first five years of operation, approximately accounting for 2% of the total world’s supply.
However, the transaction is subject to various approvals and consents, according to MMG.
Image: Las Bambas is expected to produce around 400,000t of copper a year during its first five years of operation. Photo: courtesy of Jonathan Zander.