Mubadala Investment Company and global commodity trader Trafigura have completed the sale of Minas De Aguas Teñidas (Matsa) mining complex in Spain to Australian mining and exploration company Sandfire Resources after securing the necessary regulatory approvals.
The sale is a “culmination of significant investment” in the Matsa mining complex and aligns with Mubadala’s mandate to recycle capital to maximise returns to its shareholder, the Abu Dhabi company said on Wednesday.
Sandfire acquired Matsa mining for $1.865 billion and gained operational control and economic ownership of the complex from February 1, the Perth-based company said in a statement on its website.
“Our concentrated efforts over the past six years have helped to fully realise the potential of this asset by significantly upgrading its standards of technological innovation, increasing its productive capacity and greatly improving its sustainability standards,” Danny Dweik, head of industrials at Mubadala, said.
“The company is now well-positioned to benefit from global decarbonisation initiatives under Sandfire’s ownership.”
Mubadala acquired a 50 per cent stake in Matsa from Trafigura in 2015 and together they co-owned the company and its three underground mines in southern Spain. Mubadala's portfolio of investments spans five continents, with interests in aerospace, information and communications technology, semiconductors, metals and mining, renewable energy, oil and gas, and petrochemicals.
The company, which invests on behalf of Abu Dhabi government, has yet to reveal its annual earnings and expects strong financial results in 2021 as it pursues a strategy of investment in “sectors with tailwind” from technology to renewable energy, it said.
Spain's Matsa owns and operates two mines in the municipality of Almonaster La Real and one mine in the province of Huelva, Andalucia. The company’s plant has the capacity to process more than 4.4 million tonnes of copper and polymetallic ore per year.
Copper prices surged in 2021, hitting a record high of above $10,000 per tonne in February, as a global shift towards a lower carbon economy increased demand for the metal.
“As part of the sale agreement, Trafigura Group will retain the life of mine concentrate offtake agreement for 100 per cent of Matsa offtake, building on Sandfire’s already well-established relationship with Trafigura,” the commodities trader said in a statement on its website.
“Sandfire has a strong operational base and a clear strategy to grow into an international, diversified and sustainable mining company.”
The deal follows approvals from the relevant Spanish government authorities, including approval by the Foreign Direct Investment and Competition Authority in late December 2021, Sandfire said.
The 100 per cent purchase was funded through a combination of existing cash reserves, equity raised last year and the proceeds of syndicated and corporate debt facilities, it added.
“The landmark transaction immediately transforms Sandfire into one of the largest copper-focused producers on the ASX [Australian Securities Exchange]," it said.
The complex has an extensive resource base with significant growth potential, according to the Australian company.
The surrounding exploration package, comprising a 2,450 square kilometre portfolio of mineral rights in exploration in Spain and neighbouring Portugal, offers “substantial long-term exploration upside and organic growth potential”, it said.
