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Sterlite to buy Mount Lyell copper mine in Tasmania

The Bombay-based Sterlite Group has announced that it will invest $6.3 million to buy the 100-year-old Mount Lyell copper mine from the Copper Mines of Tasmania.

Sterlite, through its subsidiary Twin Star Holdings based in Mauritius, will use the mine for its manufacturing operations, thereby insulating it from the vagaries of price movements.

The Indian firm will resume underground development, re-establish a deep drilling programme, and share in the cost of raising a tailings dam, an environmental necessity.

The Mount Lyell mine, with 200 workers employed in Australia's most depressed area, was under voluntary administration since last December, following a steep fall in copper prices worldwide over two years to about 65 cents from two pounds.

This followed a global search by the state government for a new buyer.

Sterlite chairman Anil Agarwal said the acquisition was a natural progression, providing the potential for cost savings for the copper concentrate and greater certainty of supply.

The deal was completed after negotiations between Sterlite, the government, mine administrator Alex Macintosh of KPMG, and CMT's financiers Citibank.

Although Tasmania's Energy Minister PAUL Lennon would not disclose all the details, the government will give Sterlite payroll tax and royalty reductions for five years. The size of the relief will depend on the amount of mining carried out and the number of people employed at the mine.

UNI

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