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LS-Nikko Copper sells interest in Panama mine for $635mn

Collected: 2017.09.01

Distributed: 2017.09.04

Source: Go Direct

LS-Nikko Copper Inc., a South Korea-based copper smelter, announced on Thursday it has signed an agreement with First Quantum Minerals (FQM) Ltd., a Canadian mining company, to sell its 10 percent ownership interest and shareholder loans in Minera Panama S.A. (MPSA) which holds the concession for the Cobre Panama project, a large open-pit copper development project in the Central American country.

The deal’s headline value is $635 million payable in six installments over a five-year period. The sale would bring LS-Nikko Copper a profit of some $131 million.

In 2009, LS-Nikko Copper established Korea Panama Mining Corporation (KPMC), a 50/50 joint venture company with state-run Korea Resources Corporation (KORES), which had held a 20 percent interest in MPSA.

LS-Nikko Copper said the proceeds would be used to repay debt, improve balance sheet strength and bump up production efficiency.

LS-Nikko Copper joined the mining project to meet the growing demand for copper ores in the mid-2000s. But the demand declined sharply and metal prices plunged amid a crippling recession after 2013. The company decided to sell its interest to avoid mounting instability in mining investment and to further focus on its core business of copper smelting.

Despite the interest sale, LS-Nikko Copper and KORES will reserve their rights to import 20 percent of copper ores from MPSA to Korea.

By Kim Jung-hwan

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