Rio Tinto selling Eagle mine
MARQUETTE, MI-- A Canadian metals producing company is buying Rio Tinto’s Eagle mine.
In a press release Wednesday Lundin Mining Corporation said it would acquire the Marquette County nickel and copper mine for $325 million. The price equals a $250 million purchase amount plus project expenditures from January 1, 2013 until the transaction closing of approximately $75 million, payable in cash and subject to customary adjustments.
Rio Tinto spokesman Dan Blondeau says the economy has the mining industry concentrating on each company's core assets. "Rio Tinto is going to be focusing on long-term, long-life, low-cost assets and Eagle has a shorter life span on most of their projects," he says. "Eagle is really a good strategic fit for Lundin."
Lundin CEO Paul Conibear says, “The Eagle mine represents a very unique opportunity to acquire a high-grade project which is under construction and expected to begin generating significant levels of metal production and cash flow.”
Construction on the project is 55 percent complete, with the bulk of the remaining work to be done at the Humboldt Mill.
Blondeau says it's too early to tell if Lundin intends to expand the scope of the mine.
"What we can say is that we're going to be ramping up production right away," he says. "We've been at a moderated construction pace for some time now, but as part of our agreement with Lundin we're going to be ramping up. So people will see bid packages going out for the remaining surface work and for the mining underground."
Lundin says it expects to spend another $400 million this year and next to bring Eagle into production, which is still targeted for late 2014.
Officials say the sale is expected to be finalized over the next six weeks.