REPORT: Freeport-McMoRan to Sell Candelaria Copper Mine in Chile

Freeport-McMoRan Copper & Gold Inc. has reportedly found a buyer for its Candelaria copper mine in Chile.

According to reports, Canadian Lundin Mining has agreed to purchase the copper mine for $2 billion. The miner will partner with Franco-Nevada Corp, which will pay for a stream of the mine’s future gold production.

If the report is true, the acquisition will boost Lundin’s copper production significantly.

CEO Paul Conibear revealed last year the company was looking for assets with a minimum 10-year mine life and capable of producing at least 50,000 tons of copper per year.

Freeport, which is one of the largest mining companies in the world, has been trying to sell assets to pay down its hefty $20.9 billion debt load.

Candelaria, which is Freeport’s fifth biggest mine in terms of employees, is an open-pit copper mine located in northern Chile. The joint venture, which is 80 percent owned by Freeport and 20 percent by Sumitomo Corp., produced 370 million pounds of copper and 87,000 ounces of gold last year. The Candelaria mine is Chile’s second biggest mine.

"This might not be the best time to sell a copper asset but they promised to reduce their debt," says Charles Bradford, an analyst with Bradford Research Inc. "And Candelaria's a good property that can generate some cash, and there are people out right now with money to spend."

Headquartered in Toronto, Lundin Mining produces copper, zinc, nickel and lead from mines in United States, Africa and Europe. The company has partnerships with Freeport-McMoRan on several projects around the world.