BHP calls off $320 million deal to sell Chile's Cerro Colorado

13 December 2018

BHP said on Wednesday a deal to sell its Cerro Colorado copper mine in Chile to private equity fund EMR Capital had been called off because of problems with financing.

The Anglo-Australian company, the world’s biggest listed miner, said in June it had agreed to sell the mine in a cash deal worth as much as $320 million, depending on copper price performance. Cerro Colorado is one of three mines operated by BHP in Chile.

“The decision to call off the deal was agreed upon by both parties after it became clear that financing conditions would not be met within the agreed upon timeline,” a spokeswoman for BHP told Reuters on Wednesday. She offered no further details.

EMR could not immediately be reached for comment.

While BHP expects copper to be in high demand for both the traditional economy and for electric vehicles, its preference is for large-scale projects. By its standards, Cerro Colorado is small-scale.

Cerro Colorado, in the extreme north of Chile’s copper belt, in the Tarapacá region, yielded 65,000 tonnes of copper in fiscal 2017. BHP’s flagship mine, Escondida, yields more than 10 times that amount annually.

The Cerro Colorado mine has government approval to operate until 2023 but that could be extended.