Upon completion of the deal, FCX will own 72% stake in the Morenci mine. SMMAz will have 15% interest while SMM’s fully owned affiliate will own 13% stake.
SMMAz is 80% owned by SMM and 20% by Sumitomo.
FCX president and CEO Richard Adkerson said: "This transaction represents an important initial step toward our objective to accelerate debt reduction and restore our balance sheet, while retaining a portfolio of high quality assets and resources.
"Our Morenci partnership with Sumitomo was first established 30 years ago and both companies are confident of the operation’s long-term future.
"With its long-lived reserves, substantial resource position, attractive cost structure and best in class operating team, the Morenci joint venture is positioned to be a continuing strong contributor to the success of FCX and Sumitomo."
Scheduled to be completed in mid-2016, the transaction is subject to regulatory approvals and customary closing conditions.
Proceeds from the sale will be used by FCX to repay borrowings under its bank term loan and revolving credit facility. The firm expects to record a gain of $550m gain on the transaction.
SMM expects the acquisition of additional interest in Morenci mine to increase annual production volume by around 62,000t.
The firm aims to achieve an annual copper production of 300,000 tons as part of its long-term vision.
Image: The Morenci copper mine in the US. Photo: courtesy of TJBlackwell/Wikipedia.
