Australian mining giant BHP Billiton has entered into a definitive agreement to sell its Pinto Valley copper mining operation in Arizona, along with the associated San Manuel Arizona Railroad Company (SMARRCO), to Capstone Mining for $650m.
The deal follows BHP's announcement earlier this year that it is looking to divest its interest in nearly ten undisclosed assets.
The transaction, which is subject to regulatory approval and other customary conditions, is expected to close in the second half of the 2013.
Under the terms of the deal, Capston will maintain the mine's existing environmental standards, while providing financial assistance as necessary to obtain regulatory approvals for the transfer of the applicable permits.
BHP's employees working at the mining operation and the railroad will be employed under Capstone Mining.
BHP Billiton Copper president Peter Beaven said that the sale of Pinto Valley is in line with the company's strategy and takes the transaction value of divestments announced over the past one year to $5bn.
"We are pleased to have reached agreement with Capstone, particularly given their commitment to maintain our environmental and safety standards," Beaven added.
Capstone president and CEO Darren Pylot said: "This acquisition gives Capstone our third producing mine with a long mine life and is consistent with Capstone's strategy of building an intermediate copper producer focused in the Americas."
Pinto Valley, which is estimated to produce between 130 and 150 million pounds of copper in concentrate and nearly ten million pounds of copper cathode per year, will nearly double Capstone's current production.
In February 2009, BHP temporarily halted operations at Pinto Valley, and resumed mining at the location in Q4 2012.
Mining giants BHP and Rio Tinto Group are among companies that have been divesting assets to increase earnings and cut costs following nearly $60bn of writedowns in the mining industry.
Image: Pinto Valley is estimated to produce 130-150 million pounds of copper in concentrate and nearly ten million pounds of copper cathode per year. Photo: Jonathan Zander.