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Lundin Mining Corp LUN-T on Monday said it would buy a majority stake in Chile’s Caserones copper mine for about $950-million to expand the Canadian miner’s exposure to the red metal crucial for the green energy transition.

Lundin Mining signed an agreement with JX Nippon Mining & Metals Corp to acquire a 51 per cent stake in Lumina Copper, which operates the Caserones copper-molybdenum mine in Chile. JX is a unit of Japanese oil and metals giant Eneos Holdings Inc.

Under the deal, Lundin Mining would make an upfront cash payment of $800-million and $150-million in installments over six years, Lundin Mining said in a statement.

The deal also allows Lundin the right to purchase an additional interest of up to 19 per cent in the Caserones mine for $350-million over five years, the company added.

Copper helps reduce carbon emissions and lowers the energy required to produce electricity.

“The initial controlling interest increases our exposure to what we believe is a growing top-tier copper mining district. We retain the option to further increase our ownership over the next few years at an attractive price,” Peter Rockandel, chief executive of Lundin Mining, said.

For JX, the stake sale, to be completed by June, is part of an asset portfolio review, the Japanese company said, adding that it is looking to focus on the advanced materials business while controlling volatility in its resource business.

“We are not exiting from copper mining,” a JX spokesperson said, adding the collaboration with Lundin is expected to generate synergy in productivity and cost competitiveness as the Canadian miner has several copper deposit projects near the Caserones.

The mine in the arid mountains of northern Chile has suffered a series of ramp-up delays and cost overruns, highlighting the challenges faced by miners in the country, as they shift through far-flung locations with accessible deposits largely being tapped out.

The mine’s annual output of copper concentrates has stabilized at around 100,000 tonnes in recent years.

Eneos said it will book an operating loss of 70 billion yen ($536-million) in the current financial year ending March 31 from the deal, based on the fair valuation of Lumina Copper’s assets and liabilities. It stuck to its full-year profit forecast.

Another Japanese miner, Sumitomo Metal Mining Co Ltd also sold its stake in Sierra Gorda copper mine in Chile last year after suffering huge writedown losses due to a slow ramp-up.

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