Antofagasta Plc agreed to sell its water division that operates in Chile’s Atacama desert for $960 million to Empresas Publicas de Medellin of Colombia to focus more on its copper mining business. The miner’s shares rose.
Aguas de Antofagasta provides potable desalinated water to residential and industrial customers under a 30-year concession in the northern Chilean region. The unit contributed $63.6 million in pretax earnings in 2014, Antofagasta said Thursday in a London Stock Exchange statement.
The company, owned by Chile’s billionaire Luksic family, is expanding its copper mines in Chile to meet demand expected later this decade, Chief Executive Officer Diego Hernandez said in an interview this month. Completion of the sale to the electricity, gas, water and sanitation provider EPM, owned by the city of Medellin, is expected in May.
Antofagasta shares climbed 5.6 percent, the most since January 2014, to 784.5 pence in London.
“This sale will allow Antofagasta to focus even more closely on its mining business and to advance its various development projects whilst reinforcing the strength of our balance sheet,” Hernandez said in the statement.
EPM sells electricity, gas and water to 20 million residents in Colombia, Mexico, Guatemala and El Salvador. Aguas de Antofagasta includes a desalination facility to serve the desert city of Antofagasta near a cluster of the world’s largest copper mines.