Capstone said to tap Scotiabank to divest Mexican copper mine

Capstone Copper Corp. is looking to sell a copper mine in Mexico as it focuses growth efforts in Chile, adding to a recent spate of deal-making for the red metal, according to people familiar with the matter.

The Canadian company hired Bank of Nova Scotia to start a sales process for the Cozamin underground mine, which also produces silver, said the people, who asked not to be identified discussing confidential information. The mine, among Capstone’s smaller assets, is valued at around $400 million, the people said.

Representatives from the company and Scotiabank didn’t respond to requests for comment.

The potential divestment would mark a further step in Capstone’s growth strategy centered around Chile, where it is expanding the Mantoverde mine and advancing the Santo Domingo project toward a final investment decision. While Cozamin is a steady producer, it accounts for a relatively small share of output compared with the company’s Chilean operations.

Producers around the world are looking to monetize smaller assets and launch bids for competitors after copper prices hit record highs in January. Last month, rival miner First Quantum Minerals Ltd. agreed to sell its Çayeli mine in Turkey while Hudbay Minerals Inc. agreed to acquire Arizona Sonoran Copper Co.

The wave of deal-making, including Anglo American Plc’s bid for Teck Resources Ltd. last year, follows warnings from the industry of looming shortages as miners struggle to meet rising demand from electric vehicles, renewable power and data centers.

Cozamin, located about 2.2 miles from Zacatecas City in Mexico, typically produces about 20,000 to 25,000 metric tons of copper a year. It’s been under Capstone’s ownership since 2006.

(By Jacob Lorinc)