Mitsui & Co., Ltd. ("Mitsui") and Pan Pacific Copper Co., Ltd.("PPC") have been in discussions regarding the potential 25% participation by Mitsui in the Caserones Copper Mining Project ("Project"), which is 100% held by PPC through Minera Lumina Copper Chile S.A.("MLCC"). Today, PPC has announced its decision to invest in and develop the Project. Mitsui's board has approved the investment, subject to PPC making its final investment decision and finalization of related agreements. The parties are now seeking to reach a final agreement on the details of Mitsui's participation in the Project by April 2010. Mitsui expects to acquire the 25% interest in the Project through a subsidiary for cash consideration of US$135 million.
MLCC has obtained the necessary environmental permit in Chile to develop the Project. Construction will start this year and is expected to last approximately 4 years. Production is expected to start in 2013 and to last for 28 years to produce a total of 3.5 million tons of copper and 87 thousand tons of molybdenum. The initial investment amount necessary to commence production at the mine is expected to be approximately US$2 billion.
PPC conducted the feasibility study of the Project following its acquisition of the Project in May 2006. Mitsui initiated its own study of the Project after the discussions regarding its possible participation had begun and has concluded that the Project presents an attractive opportunity for Mitsui.
Mitsui is committed to creating long-term value through development of mineral resources, and copper is one of the key business focuses of the company. Mitsui currently participates in the Collahuasi Project and Los Pelambres Project with PPC in the area of copper mining. Mitsui continues to seek opportunities in copper mining business through its global and domestic customer network.
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission.
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