Blank-check firm Metals Acquisition Corp on Thursday emerged as the winner of a years-long race to acquire Glencore’s CSA copper mine in Australia with a $1.1 billion deal.
Metals Acquisition became the top contender for the asset – one of Australia’s highest-grade copper mines – after Perth-based IGO Ltd dropped out of exclusive deal talks in February.
The purchase gives the firm access to a mine that is expected to annually produce between 41,000 and 49,000 tonnes of copper, a metal whose role in electric vehicle production has made it a coveted commodity.
Strong demand and a supply deficit sent copper’s prices soaring more than 25% prices last year and investors have said the trend was likely to continue as more companies join the fight against climate change.
“Copper is expected to play a key role in the global energy transition ‘megatrend’,” Metals Acquisition Chief Executive Mick McMullen said.
For UK-based Glencore, the sale advances a streamlining of its business. The owner of more than 150 operating sites across the globe has put 27 assets for review, 14 of which would be sold.
JP Morgan analysts said the commodities trader and miner had received an attractive price for the mine, citing the $150 million the asset was expected to contribute to core earnings in 2022.
Metals Acquisition will pay most of the deal value in cash and hand $50 million worth of its shares to Glencore. The miner will also receive royalties beyond the purchase price.
The blank-check firm plans to fund the deal with debt and the $250 million it raised in its initial public offering, among others.
Blank-check firms are shell companies that raise money through an IPO to either purchase a private company or assets.
(By Rithika Krishna; Editing by Aditya Soni)
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