April 11, 2018 / 8:46 PM / 8 days ago

Aurubis eyes smelting deals with miners in Americas, Australia

SANTIAGO (Reuters) - Aurubis AG (NAFG.DE), Europe’s biggest copper smelter, is in talks with miners in South America, the United States and Australia to set up smelting partnerships, as it pushes ahead with ambitious growth plans, its chief executive officer told Reuters.

Armed with a war chest of at least 1.2 billion euros ($1.5 billion) for potential acquisitions, CEO Juergen Schachler aims to expand Aurubis’ global footprint and move into other metals.

Schachler said in an interview at the CRU/CESCO copper conference in Santiago that Aurubis could help mining companies with their own smelting operations to improve efficiency and profitability.

“We are talking to a lot of miners ... and saying, What if we can work together either by taking over or by creating joint ventures or other means of cooperation to operate the smelters for you to increase the efficiency.”

Schachler declined to identify any specific companies, saying, “It’s South America, it’s a little bit the U.S., it’s a little bit in Australia.

“This is in an early stage. There is nothing complete,” he said.

    Aurubis produces copper by smelting copper concentrate (ore) and recycling scrap metal, and also makes copper products including wire, rod and shapes.

    The company in January made its first major acquisition since 2011, taking full control of German copper wire and rod maker Deutsche Giessdraht.

    Asked whether any further acquisitions would be announced this year, Schachler said, “I hope so,” adding that these were unlikely to be smelting operations.

    Aurubis has said it could borrow up to three times its core earnings before interest, taxes, depreciation and amortization, currently around 400 million euros, to fund expansion.

    Adding to that cash pool, the company said in February it was selling its flat-rolled products sector, with annual sales of about 1.3 billion euros ($1.6 billion), to German group Wieland. It has not disclosed the sale price.

    “Its quite a significant amount that we would have” for acquisitions, Schachler said.

    Reporting by Peter Hobson; Editing by Leslie Adler

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