Glencore copper mine fetches $US1.1bn

A US company associated with Bill Beament and Nev Power is set to purchase Glencore’s CSA copper mine for $US1.1 billion ($A1.5 billion).

Metals Acquisition Corp (MAC), which describes itself as a newly-formed blank cheque company and counts Mr Power and Mr Beament in its leadership suite, announced it would be buying the Glencore asset on Thursday.

The parties entered a definitive sales agreement, under which MAC agreed to buy the 40,000 tonne per annum New South Wales copper outfit from Glencore for US$1.05 billion in cash and a US$50 million equity stake in MAC.

A 1.5 per cent net smelter royalty will also be paid to Glencore.

The deal comes after IGO and Glencore flagged they were in potential discussions regarding a transaction for the mine in February.

But a deal was not to be and with IGO’s $A1.1 billion Western Areas buy still in progress, the companies walked away without a commercial agreement in the weeks following.

In its rationale for the buy, Metals Acquisition chief executive Mick McMullen said CSA provided his company with a cornerstone asset for a high-quality, mid-tier base metals portfolio.

"Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realize the full potential value of the asset,” Mr McMullen said in a statement.

That team includes WA businessperson Nev Power, who is currently waiting to be sentenced after pleading guilty to two counts of breaching the state’s COVID-19 travel restrictions.

Mr Power is listed on the MAC website as a director of the company.

Former Northern Star boss Bill Beament is an adviser to MAC.

Glencore director Patrice Merrin is also chair of the board of directors of MAC and holds a less than 1 per cent voting interest in the company.

“MAC is not a related party of Glencore within the meaning of the UK listing rules, and Ms Merrin has not participated in the consideration of the sale of CSA Mine by the Glencore Board,” Glencore said in a statement.

Broadly, Mr McMullen said CSA was a strong strategic fit for the company.

“Copper is expected to play a key role in the global energy transition “megatrend”, with approximately 1 million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast,” Mr McMullen said in a statement.

“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”

MAC said its board has unanimously approved the deal, which will now need shareholder and regulatory approval to cross the line.

It expects the transaction, which will be funded by a combination of debt and equity, to be completed this year.

Citi is serving as financial advisor and Squire Patton Boggs and Paul Hastings LLP are serving as legal advisors to MAC.

Citigroup Global Markets Inc., Canaccord Genuity, and Ashanti Capital Pty Ltd have been engaged as in connection with an equity raise.