Sandfire Resources (ASX: MTR), a medium-sized Australian miner, is buying Spain's Minas De Aguas Te ñ idas (MATSA) mining complex for about $1.9 billion as it seeks to become a large producer focused on copper.
The company suspended trading on Thursday morning, while Macquarie Capital and CITI, backed by investors, raised 1.2 billion Australian dollars (US $910 million) to partially fund the deal.
MATSA, previously acquired by Trafigura and Abu Dhabi Mubadala, was put up for sale earlier this year.
The copper complex in southern Spain, which began operation in 2009, consists of three underground mines that also produce zinc and lead concentrates, all of which are transported to a central treatment facility with a capacity of 4.7 million tons per year.
Once Sandfire combines MATSA with its own DeGrussa business, the business can produce up to 194000 tons of copper equivalent in fiscal year 2022.
The mines are located in the province of Verva in southwestern Spain. The area is located about 250 kilometers north of the Iberian pyrite belt. Evidence of mining activity there dates back to the Bronze Age about 4500 years ago.
Copper prices have climbed this year as the global shift to a green economy has increased demand for metals, hitting an all-time high of more than $10000 a tonne in February.
"Base metal assets that provide this size, grade, mine life and exploration advantage are extremely rare around the world," Karl Simich, chief executive of Sandfire, said in a media statement.
Sandfire said Sandfire was financing the deal through a $650 million syndicated and underwriting debt financing, equity financing and the use of existing cash reserves and corporate debt financing.
The company, which aims to be completed in the first quarter of 2022, requires foreign direct investment approval from the Spanish government and must remove other regulatory hurdles.
