Anglo American is reportedly much closer to making a decision on the future of its Quellaveco copper project in Peru. Mitsubishi is rumored to be a potential buyer of part of the company’s 82-percent stake.
Anglo American (LSE:AAL) is reportedly much closer to making a decision on the future of its Quellaveco copper mine in Peru.
The US$5-billion project in Southern Peru has been stalled since 2013, but there have been rumblings that the operation could be restarted since earlier this year. The company said in 2017 that it was planning to offload part of its share of the project in a bid to lower costs.
Reuters sources said that Anglo American has hired investment banks Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) to help with the sale, and that details will be announced within two months — within the timeframe set by the company on the project’s future.
Last month, the head of Anglo American’s copper business, Hennie Faul, told Bloomberg that the company is in the final stretch of bringing in a partner to shoulder some of the costs.
Mitsubishi is the company’s current partner, holding 18.1 percent of the project. The Japanese firm is interested in raising its stake in Quellaveco, but there are other prospective buyers, Faul said at the time.
Anglo American intends to retain 51-percent ownership and remain as operator. The company produced 155,000 tonnes of copper in Q1 2018, up 9 percent on Q1 2017, when it produced 143,000 tonnes.
Quellaveco is projected to produce 225,000 tonnes of copper per year, which would just barely put it in the top 20 copper mines globally, and would ensure Peru retains its position as the second-largest copper-producing country.
Shares of Anglo American closed down GBX 9.20 or 0.49 percent on the London Stock Exchange on Thursday, at GBX 1,883.20.
The price of copper on the London Metal Exchange is currently sitting at US$6,773.5.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.