Mubadala buys into Trafigura’s Spanish mines as part of new venture

Trading house Trafigura has sold half of its stake in three Spanish copper and zinc mines to Abu Dhabi investment company Mubadala as the two firms set up a global joint venture to invest in base metals mining.

The deal marks yet another move by the Swiss oil-to-metals trader to grow via joint ventures and to raise money via sales of stakes in subsidiaries as an alternative to floating the parent company.

For Mubadala, which was set up in 2002 by the government of Abu Dhabi to help diversify the economy, the purchase is part of a push to invest in assets other than oil. It has a portfolio valued at more than $66 billion.

Mubadala will buy 50 per cent in Trafigura’s mining operator Minas de Aguas Teñidas (MATSA) which owns the Agua Teñidas, Sotiel and Magdalena mines in southern Spain producing copper, zinc and lead concentrates.

“Investing in MATSA is a key step in growing and diversifying our existing metals and mining portfolio,” Ahmed Yahia Al Idrissi, chief executive officer of Mubadala Technology and Industry, said in a statement.

Sources close to the deal said it valued the mines business at around $1.4 billion. Trafigura in the past two years has sold stakes at a large profit in its oil mid-stream business Puma Energy and its U.S. oil storage terminals.

The latest deal with Mubadala follows Trafigura subsidiary Impala in partnership with Mubadala acquiring a controlling stake in the Porto Sudeste iron ore port in Brazil.

“This builds on our existing sector strategy and partnership with Mubadala. We are identifying new opportunities and investing thoughtfully together in ways that complement our existing portfolio,” Trafigura CEO Jeremy Weir said.

Trafigura is nearing completion of a two-year investment and expansion plan for MATSA which includes construction of a new treatment plant which will double annual processing capacity to 4.4 million tonnes per year.