Australia’s BHP Billiton agrees to sell its Pinto Valley copper mine to Capstone

Melbourne: BHP Billiton has agreed to sell its Pinto Valley copper mine and a railroad in Arizona to Capstone Mining Corp for $650 million, reaping far more than expected as the top global miner tightens its belt in a weaker market.

BHP and its global mining peers have put billions of dollars worth of mines, projects and aluminium operations up for sale as they look to slash costs, cut debt and focus on their highest returning assets as commodity prices slump.

Pinto Valley takes BHP’s total asset sales over the past 12 months to $5 billion.

The Australian company flagged earlier this year that it was looking to sell around 10 more assets, without naming them. Analysts had said Pinto Valley was a likely target, along with aluminium, manganese and some petroleum operations.

There has been speculation the major miners would find it tough to find buyers for their unwanted assets as smaller miners are strapped for cash and even Chinese companies hungry to expand have become more choosy, under pressure from Beijing.

But BHP managed to fetch much more than expected for Pinto Valley. Deutsche Bank had estimated the mine could sell for around $274 million, while UBS estimated it was worth $500 million.