Glencore strikes deal to sell Queensland's Ernest Henry

Glencore said on Wednesday that it has entered into a binding agreement with Evolution Mining for the sale and purchase of its 100% interest in Ernest Henry Mining - the owner of the Ernest Henry copper-gold mine in Queensland, Australia.

The FTSE 100 miner said it would receive AUD 1bn (£0.54bn), consisting of AUD 800m on the closing and a further AUD 200m 12 months later.

It said Evolution would assume full ownership and operational control of the copper-gold mine, and would enter into a copper concentrate offtake agreement and separate ore tolling agreement with Glencore.

Australian company Evolution has worked in partnership with Glencore for the last five years at Ernest Henry, and had emerged as a “globally-relevant” low-cost gold producer with a strong growth profile, Glencore said.

“Evolution has been a strong partner in the Ernest Henry mine for five years,” said chief executive officer Gary Nagle.

“They share our way of working and commitment to operating responsibly across all aspects of the business.”

Glencore said its commitment to north-west Queensland would continue with the Mount Isa Mines copper and zinc complex, copper smelter and Townsville copper refinery.

The company would also increase its focus on lower-cost, long-life copper assets in its global portfolio, like those in Africa and South America.

Glencore would offtake 100% of the copper concentrate produced at Ernest Henry, and would continue to be among Australia's leading producers and exporters of the metals that underpinned the “global transition” to a low-carbon future.

The transaction was expected to close in early January.

At 0819 GMT, shares in Glencore were down 0.25% at 362.8p.