World copper industry mergers
By Staff -- Purchasing, 10/7/1999
Phelps Dodge Corp.'s unsolicited and hostile bid for copper miners Asarco Inc. and Cyprus Amax Minerals Co. marks the latest move in the recent consolidation of the global copper industry. Here is the most-recent merger activity in copper:August 1999
Phelps Dodge, the No. 1 U.S. copper producer, makes a $2.5-billion unsolicited stock offer to buy Asarco and Cyprus Amax. The two companies reject the bid, deciding it is in the best interests of their stockholders to pursue their own merger instead. Phelps Dodge responds with a hostile takeover proposal to the shareholders of Asarco and Cyprus.
July 1999
Cyprus Amax and Asarco announce plans to merge. The deal, expected to be concluded in the final quarter, will create the largest publicly traded copper company, Asarco Cyprus Inc., with annual production capacity of around 2 billion lb of copper (900,000 metric tons). In addition to their U.S. operations, Asarco also owns a 54.3% interest in Peru's Southern Peru Copper Corp, while Cyprus has a 91.5% interest in the Cerro Verde mine and a 51% stake in the El Abra facility in Chile.
South Korea's LG Group and a Japanese consortium of Nippon Mining & Metals, Mitsui Mining & Smelting, and Marubeni Corp. sign a 50:50 joint venture deal. The new company, to be known as LG Nikko Copper, is scheduled to take over LG's copper smelting-refining business. The new company is capable of producing 450,000 tonnes per year of refined copper, with plans to raise to 510,000 tonnes by 2001.
June 1999
Broken Hill Proprietary Co. of Australia decides to place all its BHP Copper operations in the U.S. Southwest on care and maintenance from the end of August onward. The operations include the San Manuel mine, smelter, and refinery in Arizona and the Robinson mine in Nevada, bought from Magma Copper for $1.9 billion as part of an ill-fated deal in January 1996. The collapse in copper prices led to the value of those assets being marked down to around $650 million.
June 1997
RTZ Corp. and its 49%-owned Australian offshoot CRA merge into RTZ-CRA, which is renamed Rio Tinto plc, a huge global minerals and metals company. Numbered among its copper assets are the wholly owned Kennecott Copper operation in the U.S., a 30% stake in the huge Escondida mine in Chile, and a 14.6% interest in Freeport McMoran of the U.S., which owns the large Grasberg mine in Indonesia.
SOURCE: REUTERS, BLOOMBERG, PURCHASING
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