Bulletin: South32 Ltd. Boosts Diversification With Net Debt-Funded Stake In Chilean Copper Mine

MELBOURNE (S&P Global Ratings) Oct. 14, 2021-- South32 Ltd.'s proposed net debt-funded acquisition of a 45% interest in the Sierra Gorda copper mine in Chile increases its commodity diversification and exposure to base metals. Funded through a mix of debt and cash, the acquisition will absorb some rating headroom without immediately affecting the rating (BBB+/Stable/A-2), S&P Global Ratings today said. The proposed acquisition price is US$1.55 billion plus up to US$500 million under an earnout agreement. We view the Sierra Gorda asset as a second-tier mine with a comparatively high operating cost position, which places it in the third quartile of the global copper cost curve. This transaction follows the recent announcement that South32 may acquire an additional 25% interest

...October 13, 2021 MELBOURNE (S&P Global Ratings) Oct. 14, 2021-- South32 Ltd.'s proposed net debt-funded acquisition of a 45% interest in the Sierra Gorda copper mine in Chile increases its commodity diversification and exposure to base metals. Funded through a mix of debt and cash, the acquisition will absorb some rating headroom without immediately affecting the rating (###+/Stable/A-2), S&P Global Ratings today said. The proposed acquisition price is US$1.55 billion plus up to US$500 million under an earnout agreement. We view the Sierra Gorda asset as a second-tier mine with a comparatively high operating cost position, which places it in the third quartile of the global copper cost curve. This transaction follows the recent announcement that South32 may acquire an additional 25% interest in Mozal Aluminium (Mozal) in Mozambique for US$250 million. We note that South32's investments in Mozal and Sierra Gorda are increasing South32's exposure to higher-risk jurisdictions, particularly...

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