Jan. 14 (Bloomberg) -- Altona Mining Ltd., developer of a A$320 million ($338 million) copper venture in the Australian state of Queensland, aims to find a new partner or sell the project in the next six months after Xstrata Plc withdrew.
Altona, which also owns the Outokumpu mine in Finland, has started a process to target investors in Asia and Europe after Xstrata chose not to exercise an option to acquire a 51 percent stake in the Roseby development, Alistair Cowden, managing director of Perth-based Altona, said today in a phone interview. Credit Suisse AG is the financial adviser.
“Our preferences are either a traditional strategic party to come in for a share of the project and provide financing, or maybe a sale of the project,” or merging it with other mines to share the cashflow, Cowden said. “Target investors are not just China and we’re active in Europe in Finland so we get exposed to a lot of investors more than other Australian companies. We would like this resolved within six months.”
Profit margins for Australian producers will remain healthy at prices around $3 to $4 a pound, even as costs are higher, said Cowden. Copper gained 6.3 percent last year in New York, its third annual gain in four years, as manufacturing expanded in China, the world’s largest user of the metal. The Roseby development is located near Mt Isa in northwest Queensland and has 1.54 million tons of contained copper and 384,000 ounces of contained gold.
“Xstrata pulling out just means it doesn’t suit their strategy today or they’re not prepared to pay the price,” said Cowden. “It’s a trivial transaction for them.”
Altona shares fell 11 percent to 25 cents at the close in Sydney, their biggest drop in more than two years and bringing the company’s market value to A$132 million. The benchmark S&P/ASX 200 Index gained 0.2 percent.
Xstrata’s decision to pull out is “a commercial decision” following an independent valuation of the project in December, the Zug, Switzerland-based company said today in an e-mailed response to Bloomberg questions.
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