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Glencore, Metals Acquisition amend CSA copper mine sale deal

The CSA underground copper mine produces about 50,000 tonnes of copper concentrate per year. (Image courtesy of CSA Mine.)

Glencore (LON: GLEN) and special purpose acquisition company Metals Acquisition Corp (MAC) have amended a deal struck in March, covering the sale of CSA copper mine in New South Wales, Australia.

The mining giant and commodities trader said the value of the transaction remained at $1.1 billion, but payment terms have changed.

Under the revised terms, MAC (NYSE: MTAL.U) will pay $775 million in cash, with the ability to scale up to $875 million, and issue up to $100 million in equity.

A $75 million deferred payment will be paid out of half of the proceeds of any future equity raise, and a $75 million contingent payment when copper averages more than $4.25 per pound for 18 consecutive months.

The Swiss mining giant is retaining a 1.5% net smelter royalty.

“We have worked closely with Glencore to arrive at a transaction structure that delivers value to both parties, and an increased certainty of completion,” MAC chief executive officer Mick McMullen said in a separate statement.

“CSA also provides MAC with an ideal cornerstone asset with which to establish a high-quality, mid-tier base metals company,” McMullen noted.

The Texas-based blank check company plans to raise equity as part of an Australian Securities Exchange listing. It estimates it will need to fetch at least $125 million, likely at $10 per share.

MAC will pay Glencore a further $75 million if and when copper averages more than $4.50 per pound for two consecutive years.

If it ends up holding more than 10% of MAC, Glencore will be entitled to appoint a director to the MAC board.

MAC is chaired by former Fortescue Metals boss Nev Power and led by former Detour Gold CEO Mick McMullen.

The CSA mine employs 540 people and produces around 50,000 tonnes of copper concentrate per year. The ore is mined and processed on site and then railed 700 km to the Port of Newcastle for export. 

In 2021, the mine churned out 40,530 tonnes of copper in concentrate.

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