By Stuart Condie

SYDNEY--South32 Ltd. will pay up to $2.05 billion for a 45% stake in Chile's Sierra Gorda copper mine.

The Australian diversified miner on Thursday said it had entered into binding agreements with Sumitomo Metal Mining and Sumitomo Corp. to acquire the interest. It said it would pay $1.55 billion in cash up-front, plus a contingent price-linked consideration of up to $500 million over the 2022 through 2025 fiscal years.

South32 will have joint-control of Sierra Gorda alongside KGHM Polska Miedz, which holds a 55% stake in the project.

South32 said it will fund the acquisition with a combination of cash-in-hand and a $1 billion underwritten debt facility. It had a $660 million cash balance at the end of September and expects the transaction to be immediately earnings accretive.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

October 13, 2021 19:24 ET (23:24 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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