Anglo American plc announced that it has entered into a Heads of Agreement with Mitsubishi Corporation (n++Mitsubishin++) in relation to Mitsubishis proposed acquisition of a 21.9% equity interest in Anglo American Quellaveco S.A., which owns the Quellaveco copper project in Peru, for a total consideration of $ 600 million. Mitsubishi already holds an 18.1% interest in AAQSA and, following closing of the Proposed Transaction, Mitsubishis interest will increase to 40%, while Anglo American will retain 60%.
The total consideration of $ 600 million is comprised as follows:
$ 500 million upon closing of the Proposed Transaction; $ 50 million upon total ore treatment rates at Quellaveco reaching at least 150 thousand tonnes per day1; and $ 50 million upon total ore treatment rates at Quellaveco reaching at least 180 thousand tonnes per day1.
The total consideration implies a valuation for 100% of Quellaveco of $ 2.74 billion. The consideration will be settled upon closing by way of a primary share subscription2 in AAQSA by MCQ Copper Ltd., a wholly owned subsidiary of Mitsubishi, which will pre-fund a portion of Anglo Americans share of the required capital expenditure for the development of Quellaveco.
Mark Cutifani, Chief Executive of Anglo American, said: n++The successful syndication of a 21.9% interest in Quellaveco confirms the world-class quality of our copper asset in Peru and aligns with our disciplined approach to how we allocate capital. We are pleased to be able to extend our longstanding partnership with Mitsubishi and look forward to its ongoing contribution and strong support for the development of Quellaveco.n++
Closing of the Proposed Transaction is expected in Q3 2018 and is subject to a number of conditions, including required regulatory approvals, approval by Mitsubishis Board, and approval to develop the Quellaveco project by Anglo Americans Board.