Sumitomo Metal Mining (SMM) and Sumitomo Corporation (SC) have concluded the acquisition of 30% indirect interest in Compañia Minera Teck Quebrada Blanca (QBSA) from Teck Resources in a deal valued at $1.2bn.
QBSA owns the Quebrada Blanca Phase 2 (QB2) project located in northern Chile.
Teck now owns a 60% indirect interest in QBSA, while Empresa Nacional de Minería continues to hold a 10% carried interest.
This year, SMM and SC are expected to contribute around $1.3bn to the QB2 project and Teck is set to spend about $175m.
The company noted that the combination of proceeds from the transaction and proposed project financing reduces its share of equity contributions toward the $4.739bn estimated capital cost of the QB2 project to $693m.
QB2 is estimated to produce 316,000t of copper equivalent each year for the first five full years of mine life and has an initial mine life of 28 years.
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The project also has a number of major permits in place for future expansions, and features new technology to improve safety, productivity and sustainability, including an integrated operations centre located in Santiago.
In April last year, Teck increased its stake in the Quebrada Blanca copper mine to 90% with the acquisition of Chilean company Inversiones Mineras, which held a 13.5% stake in QBSA
As part of the agreement signed in December last year, Sumitomo also agreed to make a supplemental payment of $50m to Teck if QB2 mill throughput reaches certain conditions.
The company will also contribute an additional amount of the incremental value of the expansion if the parties elect to participate in the major expansion project.