Australian mining company Evolution will spend $1 billion to buy a major copper-gold mine off Swiss multinational Glencore.
Key points:
- Australian mining company Evolution will purchase the Ernest Henry copper-gold mine from Glencore for $1 billion.
- The sale indicates ‘confidence in the local mining sector’ as demand for copper increases in the global market
- Community leaders are confident the new owners will focus on growing local workforces
The Ernest Henry Mine, in Queensland’s North West Minerals Province, will be 100 per cent Australian-owned, indicating “growing confidence in this mining sector”, according to industry analysts.
Evolution was already involved in Ernest Henry after acquiring rights to 100 per cent of the gold produced at the mine and 30 per cent of the copper, back in 2016.
The deal is the biggest single transaction ever executed by Evolution, which has grown into one of Australia’s top three gold miners over the past decade.
“This most certainly signals confidence in the region,” said senior resource analyst at MineLife Gavin Wendt.
“Mount Isa and Cloncurry have outstanding reputations as places to do business in; there’s low political risk and companies know that the rules aren’t going to be changed on them suddenly.”
“Ernest Henry is a world class asset and a very meaningful one in terms of its output.
“This makes a mine like Ernest Henry extremely valuable in the global market.”
Mr Wendt said Evolution was the ideal sized company to take over ownership of the mine.
“Glencore is a very large company and typically these companies look at their asset portfolio and make a judgement call on whether certain projects are still relevant.
“Decisions might have something to do with returns in relation to the size of the company,” Mr Wendt said.
“For a smaller company like Evolution, this is the ideal sort of asset particularly because they had the gold rights and this is an easy way for them to expand in copper.
Boost to communities
Cloncurry Shire Mayor Greg Campbell said the sale proved the value of the area to the nation’s mining sector and was confident the new Australian owners would focus on growing the local workforce.
“To me that’s a very positive number; Ernest Henry doesn’t operate that high currently but the impression I get is that the management team at Evolution are a lot closer to operations than Glencore is.
Evolution would not be making changes to senior management structure, the company indicated in a statement.
“Mining has been strong for 152 years and Cloncurry is going to be the centre of that success for many years to come,” Mayor Campbell said.
The sale will be finalised in early January, 2022.
