The owners of Spain's Minas de Aguas Teñidas (MATSA) plan to launch a sale of the copper miner on Friday in a deal led by investment banks Bank of Montreal (BMO) and UBS that could fetch up to $2 billion, four banking sources said.
Global commodities trader Trafigura and Abu Dhabi state investor Mubadala, which co-own MATSA and its three underground mines in southern Spain, set a deadline for initial offers from potential buyers by the end of the week, kicking off the formal sales process, the sources said.
The company was valued by two of the four bankers at between $1.5-billion and $2-billion.
Trafigura, Mubadala, MATSA and UBS declined to comment. BMO was not immediately available for comment.
MATSA produced more than 300 000 t of copper concentrate - partially processed copper ore - in 2020. The mines also produce zinc and lead concentrate.
Financial advisers on the sale have reached out to mid-tier mining groups that may want to add copper to their portfolios as demand for the metal is rising for use in renewable energy projects and electric vehicles, the sources said.
Copper prices hit a record high above $10 000/t in February, before slightly retreating.
Canada's Lundin Mining and Hudbay Minerals as well as Australian miner South32 are likely to show an interest, one of the sources said.
First Quantum could also show appetite, one of the sources said.
Lundin did not respond to a request for comment and South32 declined to comment.
A spokesperson for Hudbay said the company's policy is to not comment on rumour or speculation in the market. First Quantum declined to comment.
Some Chinese base metals producers may also make an offer, one source said, despite rising concern in Europe about China state-owned enterprises' investment in critical sectors and the lack of reciprocal market access.