Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

Quadra Ends Plan for Venture With China’s State Grid

Don't Miss Out —
Follow us on:

June 16 (Bloomberg) -- Quadra FNX Mining Ltd. said it failed to reach agreement with State Grid Corp. of China, the country’s largest electrical-system operator, to form a joint venture to develop copper assets in Chile.

A memorandum of understanding between the companies to help finance the Sierra Gorda project expired June 15, Vancouver-based Quadra said today in a statement. State Grid had agreed in March to form a venture that would control Sierra Gorda and Quadra’s Franke mine in Chile. A plan for State Grid to buy shares representing a 9.9 percent stake in Quadra will also be unwound, Quadra said.

“We intend to remain on our previously stated development timeline,” Quadra Chief Executive Officer Paul Blythe said in the statement. The company has the financial resources to continue the project, he said.

State Grid wasn’t willing to put up enough money to advance development of the $2 billion Sierra Gorda mine before the issuance of project permits, Quadra said.

“The risk to funding the Sierra Gorda project has increased,” Greg Barnes, a Toronto-based analyst at TD Securities, said today in a note to clients. While Barnes said his analysis suggests Quadra could fund the project from its own cash flow, “this would not be a prudent strategy given the size of the project.”

Quadra fell 10 cents to C$12.48 at 4:10 p.m. in Toronto Stock Exchange trading. The shares have declined 14 percent this year.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.