Sterlite to acquire third-largest US copper producer Asarco for $2.6 billion

31 May 2008

Mumbai: Sterlite Industries (India) Ltd, a subsidiary of London-based metal and mining conglomerate Vedanta Resources plc, has agreed to acquire Asarco LLC, a Tucson, US-based mining, smelting and refining company, for $2.6 billion (about Rs11,000 crore), in cash.

Sterlite will finance the acquisition of Ascaro's operating assets through a mix of debt and existing cash resources. The integrated assets to be acquired include three open-pit copper mines and a copper smelter in Arizona, US and a copper refinery, rod and cake plant and precious metals plant in Texas, US.

The acquisition will be on a cash-free and debt-free basis. Sterlite will assume operating liabilities but not legacy liabilities for asbestos and environmental claims for ceased operations, the company said in a press release.

Asarco, formerly known as American Smelting and Refining  Company, is an over-100-year-old company and is currently the third largest copper producer in the United States. It produced 235,000 tonnes of refined copper in 2007.

Asarco's mines currently have estimated reserves of approximately five million tonnes of contained copper. For the year ended 31 December 2007, Asarco had total revenues of approximately $1.9 billion.

''We are delighted to have reached agreement on this important acquisition, which is a significant milestone for our Group,'' said Anil Agarwal, chairman, Sterlite.