Xstrata Copper has entered into an agreement with Exco Resources to acquire the E1 and Monakoff copper tenements in north-west Queensland, Australia for a cash value of A$175m ($183m).

El and Monakoff tenements, located close to Ernest Henry mining processing facilities, contain open pit copper mineral resources with completed feasibility studies.

Ore produced from these tenements will be sent to Ernest Henry facility for processing.

Xstrata Copper North Queensland division COO Steve de Kruijff said Ernest Henry’s open pit operations are expected to be completed soon and the firm is currently in the process of transforming the site into a major underground mining operation with an associated magnetite extraction plant.

“Subject to transaction completion and the necessary government approvals, we expect initial production from the E1 and Monakoff copper projects to commence in the second half of 2012,” Kruijff said.