JX Nippon Mining to buy partner's stakes in Chile's Caserones copper mine (updated)
09/11/2020 09:56
* Mitsui Mining to book 20 bln yen loss from the deal in
FY20/21
* Mitsui & Co expects 7 bln yen loss from the deal in
FY20/21
* Three owners have booked $4.3 bln impairment losses on the
mine
(Adds details and comments)
By Yuka Obayashi
TOKYO, Nov 9 (Reuters) - JX Nippon Mining & Metals Corp, the
metals unit of Eneos Holdings 5020.T , said on Monday it has
agreed to buy the stakes in its Caserones copper mine in Chile
owned by its partners Mitsui Mining and Smelting 5706.T and
Mitsui & Co 8031.T for an undisclosed sum.
The mine's annual output of copper concentrates has
stabilised at more than 100,000 tonnes after a series of ramp-up
delays and cost-overruns forced the three companies to book
445.7 billion yen ($4.3 billion) of impairment losses in total.
Mitsui Mining, which holds 25.87% stake in Caserones, said
it would book a 20 billion yen ($193 million) loss from the deal
in the current financial year while Mitsui, owner of a 22.63%
stake in the mine, said it expected a 7 billion yen loss from
the deal.
The Caserones project's cost more than doubled to $4.2
billion from an expected $2 billion because of factors including
a spike in labour costs and bad weather.
Mitsui Mining has booked an impairment losses of about 80
billion yen in total since 2014 and Mitsui has written down 95.7
billion yen.
"It would help boost our corporate value more if we use
resources that are set aside in Caserones in other areas,"
Mitsui Mining said in a statement.
For trading house Mitsui, this is a part of a restructuring
of its asset portfolio, it said, although copper will remain a
core part.
JX, which has posted a total of 270 billion yen of
impairment losses on the project, declined to comment on the
deal's impact on its earnings, saying its parent Eneos would
announce its results later this week.
After the deal, JX aims to increase production and extend
the life of Caserones by investing in automation using advanced
technology, it said.
($1 = 103.5400 yen)
(Reporting by Yuka Obayashi; Editing by Christian Schmollinger
and Barbara Lewis)
((Yuka.Obayashi@thomsonreuters.com; +813-4563-2761;))