Copper deals on the cards as MAC raises cash for its $1.6bn Glencore purchase

Copper is likely to be the commodity of the year, as deal flow accelerates across the globe.

As US-based Metals Acquisition Corp inches towards the closure of its $US1.1bn ($1.6bn) deal to buy Glencore’s CSA copper mine at Cobar, a few other future prospects are opening up for Australian investors looking for copper exposure after the exit of OZ Minerals from the ASX.

MAC ended March on something of a high, having – more than a year after first agreeing to buy the Glencore mine – put in place a few more lending agreements to close the deal. Included is a $US205m syndicated term loan, plus a $US25m revolving credit facility and another $40m letter of credit to cover the mine’s rehabilitation liabilities. On top of that, MAC tapped Sprott for $US135m in debt, and issued the metals investor $US15m in shares.

It also closed out a group of copper and silver streaming deals with Osisko worth about $US150m, plus associated equity placements.

That should, with a bit of luck, put MAC on track for an ASX listing this year, as other local copper assets begin to hit the market.

China Moly is also launching a sale process for its Northparkes copper and gold mine, 27km northwest of Parkes in central west NSW.

The asset, which was previously owned by Rio Tinto, is up for sale through Citi and Standard Chartered and is considered a long life mine.

Deal experts say that, while South32 may find the acquisition too small, Sandfire Resources would take a look, as would Evolution Mining, Newcrest and Fortescue Metals, although 29 Metals is set to side step the process.

Yet Canada’s Lundin Mining’s acquisition of a 51 per cent stake in the Caserones copper mine in Chile for about $US950m last month shows suitors are prepared to pay top dollar for mines producing copper, needed to make batteries for electric vehicles, plus many other uses.

Should Northparkes receive top dollar for China Moly’s 80 per cent stake, then co-owner Sumitomo may also put its 20 per cent interest in the mine on the block.

The move by China Moly comes amid speculation Glencore could put its Mt Isa copper assets on the market if it successfully closes a deal with Teck, with the mines, a smelter and copper refinery likely to be surplus to requirements.