Vedanta enters term sheet agreement to divest Mt Lyell Copper Mine in Australia
Vedanta Ltd has announced that its 100% subsidiary Monte Cello BV (MCBV) has entered into a Term sheet agreement to divest Mt Lyell Copper Mine in Australia.
Vedanta in a regulatory filing at the BSE has said, "Monte Cello BV ("MCBV"), a 100% subsidiary of Vedanta Limited, has entered into a Term sheet agreement to divest Copper Mines of Tasmania ("CMT") by way of an Option Agreement with New Century Resources."
MCBV is 100% owner of the Mt Lyell Copper Mine in Australia, a small copper asset that has been on care and maintenance for the last 5 years and not strategic for Vedanta with its size and country presence.
Following an internal strategic review, the decision was made last year to divest CMT, running a global sale process to bring in a capable operator and potential owner to evaluate and eventually restart operations at Mt Lyell, creating value for the community, Tasmanian economy, shareholders and Vedanta.
Mt Lyell has been operating since the 1890s and was acquired by MCBV, in 1999. Under Vedanta ownership, Mt Lyell was successfully operated for over 15 years. The mine was placed into care and maintenance in 2015 following two safety incidents and depression in the copper market.
The terms of the Option Agreement include a minimum expenditure commitment of US$10 million over the two-year option period by New Century towards development and exploration, plus reimbursement of ongoing care and maintenance activities, with an option of right to terminate after 12 months.
The transaction is subject to full-form documentation, which is expected to be signed by the end of October 2021.