TORONTO/LONDON (Reuters) - Canada’s Teck Resources, Lundin Mining and HudBay Minerals are among a number of suitors that have submitted bids for BHP Billiton’s Cerro Colorado copper mine in Chile, people familiar with the matter said.
The Anglo-Australian miner expects the asset to fetch as much as $800 million, the people said, declining to be named as the process is private.
BHP said on Wednesday that it has started a sales process to potentially divest Cerro Colorado, without naming the potential buyers.
Teck, Lundin and HudBay declined to comment.
Sources have previously said Chile’s Empresas Copec SA, a conglomerate looking to diversify into copper, was also interested. Cerro Colorado is located in the Tarapacá region, the extreme north of Chile’s copper belt, and yielded 77,000 tonnes of copper in fiscal 2016. BHP’s flagship mine Escondida, which also is in Chile, yields more than 10 times that amount annually.
BHP has earmarked large long-life copper mining as a key growth sector in years to come as expansion work in its iron ore mining business in Australia slows down. The move by BHP, the world’s largest miner, is part of a wave of asset divestitures the company has been undertaking. Last month, the company put its Fayetteville shale gas assets in the United States back on the block. Last year, BHP agreed to sell its coal assets in Indonesia to partner Adaro Energy.
Earlier this year, U.S. activist investor Elliott Management launched a push for a range of changes, including a spinoff of U.S. oil assets and an overhaul of its corporate structure. BHP has rejected those recommendations..
While the sales process for Cerro Colorado is quite robust, there is no certainty it will result in a transaction, the people said.
A final deal could still take some months, the mine’s union said on April 27 after BHP updated union leaders on the proposed sale ahead of planned visits to the deposit by potential buyers. The Cerro Colorado mine has government approval to operate until 2023 but that could be extended.
Reporting John Tilak in Toronto, Nicole Mordant in Vancouver and Clara Denina in London; Additional reporting by James Regan in Sydney, Barbara Lewis in London and Susan Taylor in Toronto; Editing by Denny Thomas and Chizu Nomiyama