Freeport-McMoRan selling 80 pct. of stake in Chilean mine for at least $1.8B to Lundin

Markets Associated Press

Freeport-McMoRan Inc. is selling 80 percent of its stake in a copper and gold mine in Chile for at least $1.8 billion.

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The mining company announced the sale agreement Monday for the Candelaria-Ojos del Salado mine with Lundin Mining Corp. of Canada. In addition to $1.8 billion in cash, Freeport-McMoRan also said it will receive 5 percent of copper revenues in any year over the next five years if the average price exceeds $4 a pound. It's currently trading at just over $3 a pound. That could total as much as $200 million, the company said.

The sale, with an effective date of June 30, 2014, is expected to be completed by year's end subject to approval by regulators.

Freeport-McMoRan said it expects to earn about $1.5 billion after taxes from the sale, excluding the additional fees.

Company executives said the deal is a step in its ongoing efforts to reduce debt, following the $3.1 billion sale of its Eagle Ford shale assets in Texas in June.

Lundin said the remaining 20 percent of the mine will continue to be held by Sumitomo Metal Mining Co. and Sumitomo Corp.