October 2016: After months of negotiations with shareholders and creditors, private equity firm Minería Activa has acquired a 90% stake in mining company Pampa Camarones SA. The founding shareholders Samsung C&T of South Korea and Pampa Mater, a subsidiary of construction firm Arrigoni, will retain 10% of the shares.
Pampa Camarones SA mines the Salamanqueja deposit, which it leases from state mining development corporation ENAMI after winning a tender in 2009. Production began in 2014 following an investment of US$70M to develop the mine and build an 8,500tpa SX-EW facility.
However, its ramp-up coincided with the sharp fall in copper prices and the company soon ran into financial difficulties.
In April this year, having run up debts of CLP7.500M (US$11.3M) in the previous six months, the company sought bankruptcy protection from creditors which was finally granted on September 1st.
At the time, the company had debts of US$78.1M while its assets, including mine property, plants and equipment, were valued at US$65.9M. The number of employees has been slashed from around 200 to just 64.
Under the deal with Mineria Activa, the new investor will pay US$18M for its controlling stake while Pampa Camarones’s creditors have agreed to write down the company’s debts from US$115M to US$21.
The deal will bring relief not only for the company’s employees but also for small-scale miners in Region XIV. Through a fifteen year deal with ENAMI, which was also among the company’s creditors, Pampa Camarones uses part of its capacity to treat ore from mines in the region. With the plant set for closure, the miners had nowhere else to sell their output and faced going bust themselves.