Anglo Sells Smaller Chile Mines to Audley for $300 Million

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Anglo American Plc agreed to sell two copper mines in Chile to a group of investors led by Audley Capital Advisors LLP under a plan to divest less profitable assets.

The Norte copper unit, comprising the Mantoverde and Mantos Blancos mines in northern Chile, will be sold for $300 million in cash, potentially rising to $500 million, London-based Anglo said in a statement on Monday. The deal should be completed this quarter.

Orion Mine Finance Group, headed by Red Kite Group founder Oskar Lewnowski, is the principal co-investor. John Mackenzie, Anglo’s former copper chief, is now heading Audley’s mining division.

Anglo is selling coal, platinum and copper assets and reducing headcount to preserve cash amid a commodities rout that has sent prices to a 16-year low. The company said it’s focusing on expanding its biggest and most profitable operations, including its Collahuasi and Los Bronces mines and the Quellaveco project in Peru. The producer has previously flagged the sale of a number of assets to raise $3 billion.

“Although the transaction is only a modest step in deleveraging the balance sheet, the fact that Anglo American got another transaction done is a positive sign,” Morgan Stanley said in a note to investors on Monday. The bank valued the mines at $427 million.

Above Valuation

Investec Plc said the sale price was “well above” their valuation, while Liberum Capital Ltd. said it was higher than they expected.

Anglo shares dropped 9.9 percent to 660.2 pence by the end of trading in London, the lowest close in more than 15 years. The stock is down 45 percent this year, the second-biggest drop on the U.K.’s benchmark FTSE 100 index, after Glencore Plc.

“The sale of our Norte copper assets to the Audley consortium represents a good outcome for Anglo American,” Chief Executive Officer Mark Cutifani said in the statement. “We are focusing our diversified portfolio on our largest and most value accretive assets.”

Copper is down 21 percent on the London Metal Exchange this year and reached the lowest since 2009 on Monday.

Macquarie Capital Ltd. advised Audley and Orion, the bank said in a statement.

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