• 24 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 1 day Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 1 day Syrian Rebels Relinquish Control Of Major Gas Field
  • 1 day Schlumberger Warns Of Moderating Investment In North America
  • 1 day Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 1 day Energy Regulators Look To Guard Grid From Cyberattacks
  • 1 day Mexico Says OPEC Has Not Approached It For Deal Extension
  • 1 day New Video Game Targets Oil Infrastructure
  • 1 day Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 2 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 4 days China To Take 5% Of Rosneft’s Output In New Deal
  • 4 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

Is South America Set For A Gold Rush?

A Chinese gold miner is…

Alt Text

Copper Prices Ignited By Chinese Demand Growth

Copper prices saw some gains…

Alt Text

Will Ecuador’s Mining Sector Return To Its Golden Days?

Despite the recent political problems…

Mining Hedge Funds Just Bought These Copper Deposits... Cheap

Mining Hedge Funds Just Bought These Copper Deposits... Cheap

I wrote earlier this month about speculation that investment funds were circling mining operations in Chile.

And this week, the rumours were confirmed.

As reported by local Chilean press, the buyer of Anglo American's for-sale copper assets in the country was confirmed as the U.K.'s Audley Capital. A billion-dollar hedge fund specializing in natural resources.

Audley will now take control of the Mantoverde and Mantos Blancos mines. In partnership with Orion Mine Finance Group. Related: Midweek Sector Update: As China Disappoints All Eyes Are Turning To Riyadh

The buy confirms a trend that's been shaping up of late -- namely, the increasing role of investment funds in the natural resource market.

With funds from traditional mining firms drying up, and retail financing markets still bleak, such investment groups have become one of the only buyers in the market when it comes to assets. Especially given the billions of dollars such funds have raised over the last few years.

And it appears these groups are buying at opportune time. Based on the purchase price Audley is paying for its new Chilean mines, at least. Related: Is The Fed Oil’s Only Hope Right Now?

That's $300 million. A far cry from the $1 billion purchase price that was originally being pegged by analysts for this week's purchase -- and had been confirmed by unnamed sources close to deal in an interview with the Wall Street Journal last November.

If those figures are correct, it suggests the market value of these assets has declined by 70 percent over the last nine months. Perhaps driven by the fall in copper prices of late. Related: Does Arctic Drilling Have A Future With Sub $50 Oil?

All of which is great news for buyers. The consortium did throw a bone to the sellers at Anglo American by agreeing to pay an extra $200 million if criteria are met relating to operating performance, mine life, and even the copper price itself. But overall, the deal looks to be very low risk for the incoming owners.

This could become the first in a series of such transactions. Watch for more asset purchases from investment funds over the coming months.

Here's to buying cheap,

Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News