On October 14, 2021, Sumitomo Metal Mining Co. Ltd. (SMM) and Sumitomo Corporation (SC) each entered into definitive agreements to sell to South32 Limited their collective 45 percent interest in Sierra Gorda S.C.M., the operating company for the Sierra Gorda copper mine in Chile’s Antofagasta region. The upfront portion of the deal is valued at approximately $1.7 billion, subject to certain adjustments, with a contingent consideration of up to $500 million linked to price and production thresholds through the end of 2025.
The transaction was more than 18 months in the making and at times required coordination across five or more time zones. It also survived the challenges of the pandemic, which, among other things, presented significant hurdles to facilitating site visits as part of the diligence process.
S&C has represented SMM and SC for decades on various matters, including representing both SMM and SC on their original Sierra Gorda acquisition and joint venture arrangements related to the mine. S&C has also represented Sierra Gorda itself on various financing matters since its inception in 2012.
South32 is an Australian diversified metals and mining company that will take over co-ownership of Sierra Gorda alongside Poland’s KGHM Polska Miedz S.A. Sierra Gorda is expected to produce roughly 180,000 metric tons of copper this year.
The S&C team advising SMM and SC includes Sergio Galvis, Benjamin Kent and Andrew Ferry. Daniel Bleiberg is advising on tax matters. Juan Rodriguez and Axel Beckmerhagen are advising on antitrust-related matters.