Canada-based diversified base metals company Lundin Mining has completed acquisition of an 80% ownership stake in Candelaria / Ojos del Salado copper mining operations for $1.8bn from Freeport-McMoRan.

As part of the deal, Lundin Mining has acquired mine and supporting infrastructure of the Chilean copper mine.

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Lundin Mining CEO and president Paul Conibear said: "The completion of the Candelaria acquisition adds another cornerstone asset to the company that will deliver excellent value to shareholders and contribute significantly to growth in production, cashflow and earnings.

"Candelaria / Ojos del Salado copper mine is estimated to have recoverable reserves of four billion pounds of copper and 1.1 million ounces of gold." 

"We look forward to establishing an excellent reputation in Chile over many years to come as we work closely with our new employees and stakeholders at Candelaria in order to unlock additional value from this high-quality asset. Lundin Mining paid $1.85bn and $52m for cash and non-cash working capital and other agreed adjustments.

Lundin Mining will pay contingent consideration of up to $200m payable calculated as 5% of net copper revenue in any annual period over the next five years, if average copper price exceeds $4 per pound.

Freeport-McMoRan is planning to use $1.5bn from the proceeds to repay its debt and include about $450m as after gain tax in its fourth quarter result this year.

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Candelaria / Ojos del Salado copper mine is estimated to have recoverable reserves of four billion pounds of copper and 1.1 million ounces of gold as of 31 December 2013.

During the first nine months of this year, the mine produced 246 million pounds of copper and 62,000oz of gold.