Vedanta to exclude base metals business from sweeping demerger
The group said it will consider the base metals business demerger at a later stage.
Newmont Mining Corp. (NYSE: NEM) and Peruvian partner Buenaventura have sold Japan’s Sumitomo Corp. a 5%-stake in their Yanacocha gold mine in Peru for $48 million, making the Asian trading house a partner in the business.
The US miner and Buenaventura’s ownership interests in the mine, which was Peru’s largest gold operation until output began falling in recent years, will be 51.35% and 43.65%, respectively.
Sumitomo said Yanacocha, which has been in operations since 1993, had “substantial future growth options” as it also contains copper deposits.
“We had a long and productive partnership with Sumitomo at Batu Hijau in Indonesia, and we look forward to working with them and Buenaventura to advance the next generation of profitable production at Yanacocha,” Newmont’s executive vice president for strategic development, Randy Engel, said in the statement.
Newmont, the only gold company that forms part of the S&P500 index, approved last year full funding for the Quecher Main project, which is expected to extend the Peruvian mine productive life to 2027.
Sumitomo said Yanacocha, which has been in operations since 1993, had “substantial future growth options” as it also contains copper deposits, adding that the mine life could be extended for further 12 years — until 2039.
Based on Newmont’s March report, Yanacocha is expected to produce 470,000-545,000 ounces of gold this year on a 100% basis.
Sumitomo’s move comes as Japanese trading companies have been grabbing assets and increasing their stakes on a few of them thanks to higher commodities prices, which have boosted their profits.
Early this year, Mitsui & Co. increased its stake in Chile’s Collahuasi copper mine to 11.03%. Anglo American and Glencore also hold a stake on the operation (44% each),
Mitsubishi Corp said last week it was hiking its holding in the Anglo American’s Quellaveco copper project in Peru by 21.9% for $600 million, taking its holding to 40%.
