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Demand for ‘green energy’ metals like copper, nickel, lithium, and cobalt has risen sharply, driven by the global move to lower carbon emissions and electric vehicle makers chasing battery ingredients. On October 13, Tesla inked a multi-year nickel supply deal with New Caledonia’s Prony Resources, which will give the EV maker roughly 42,000 tonnes of the metal, making it the miner’s largest customer; and late last month, China’s EV battery giant Contemporary Amperex Technology (CATL), said it had signed a deal to acquire Canada’s Millennial Lithium for about $305 million. Millennial has two lithium brine projects in Argentina.

The appetite for copper assets in particular is behind much of the recent M&A. Australian miner Sandfire Resources unveiled plans late last month to acquire the Minas de Aguas Tenidas mining complex in Spain from Trafigura and Abu Dhabi’s state-owned Mubadala for $1.9 billion. The complex has three underground copper mines.

The latest deal on October 14 is South32’s acquisition of a 45% stake in Sierra Gorda, a low-grade open-pit copper mine in Chile’s Antofagasta region for an upfront cash payment of $1.6 billion, and a further amount of up to $500,000, structured as a contingent price-linked consideration and payable annually over four years as a percentage of incremental revenue above agreed copper price and production thresholds.

“We are actively reshaping our portfolio for a low carbon world and the acquisition of an interest in Sierra Gorda will increase our exposure to the commodities important to that transition,” South32’s CEO Graham Kerr said. “Copper is a critical metal in the decarbonisation of the world’s energy networks and has strong long-term market fundamentals.”

The mine is expected to produce 180,000 tonnes of copper, 5,000 tonnes of molybdenum, 54,000 oz. gold and 1.6 million oz. silver (214,000 tonnes copper-equivalent) in calendar 2021. South32 is acquiring its stake from Japan’s Sumitomo Metal Mining (31.5%) and Sumitomo Corp. (13.5%). Polish miner KGHM owns the other 55%. South32 is funding the transaction with cash on hand and an underwritten debt acquisition facility.