SANTIAGO – The sale of BHP Group’s smallest copper mine in Chile has been called off after the would-be buyer, EMR Capital Advisors, failed to come up with the money on time.

The two parties ended their agreement for the Cerro Colorado mine, with Melbourne-based EMR unable to meet a funding deadline for the $320-million deal, a BHP official said Wednesday in a text message, confirming earlier comments by union president Marcelo Franco. EMR didn’t respond to requests for comment made outside of normal business hours.

In June, BHP agreed to sell the mine for $230-million in cash, plus $40-million in proceeds from copper stocks and about $50-million depending on prices of the metal. Deutsche Bank had said in a report last year it could fetch as much as $800-million.

"The decision to put an end to the agreement was taken between the two parties when it was evident that the financing conditions would not be met within the deadline," the BHP official said.

BHP started the sale process in March 2017 as part of a push by the world’s biggest mining company to focus on major operations. Cerro Colorado produced 77 256 metric tons in the year through June, about one sixteenth the output from BHP’s Escondida mine, also in northern Chile.

Cerro Colorado has options that could potentially expand its lifespan for decades, the company has said. But its environmental license runs out in 2023 and after that new terms will have to be negotiated for water use.

OPTIONS OPEN
Union leaders were told the mine will remain within its Pampa Norte division, but that all options remain open. In the lead-up to the sale, the union had expressed concern over possible job cuts.

"As BHP we will keep working to maximize the value of Cerro Colorado and its options over the long term," the company told workers on an internal statement signed by Cerro Colorado General Manager Patricio Hidalgo, a copy of which was seen by Bloomberg.