Lundin Mining completed the purchase in the Chilean mine for approximately US$950M.

Canadian miner Lundin Mining has closed the acquisition of 51% from JX Metals of SCM Mineral Lumina Copper Chile (Lumina Copper), which owns the Caserones copper-molybdenum mine in Chile. As part of the deal, Lundin Mining obtained commitments for a three-year term loan totalling US$800M, with an additional US$400M accordion available upon receipt of additional binding commitments and closing of up to an additional 19% interest in Lumina Copper.

The Caserones mine is a large open-pit porphyry copper deposit located in the Atacama region of Chile. Lumina Copper owns and operates the mine hosting chalcopyrite and molybdenite mineralisation yielding mineral reserves of 1.04Bnt of sulphides containing average grades of 0.34% Cu and 0.012% The processing facilities at the mine have been in commercial operation since 2014 and have historically produced approximately 100-200kt Cu-in-concentrate, 1.7-2.5kt Mo-in-concentrate and roughly 25ktpy copper cathodes. H2 2023 guidance at the mine stands at 60-65kt Cu and 1.5-2kt Mo.

This deal increases Lundin Mining’s exposure to copper, a metal that is crucial for the energy transition. It also benefits from co-product molybdenum, for which the market remains very tight, resulting in recent record prices. The noble alloy is used largely in alloy and stainless steels with demand currently impacted by China’s stuttering economic recovery. However, disruptions to supply in Chile and Peru has put pressure on the molybdenum supply chain through the first half of 2023, continuing a trend from 2022. Despite a gradual rise in primary molybdenum output over recent years, the industry continues to rely on copper mines in South America as the main short-term solution to return the market to balance.