Antofagasta sells its water division to EPM for $960m

Chile based copper mining firm Antofagasta has sold its water utility division Aguas de Antofagasta (ADASA) to Empresas Públicas de Medellín (EPM) for around $960m.

The water unit supplies desalinated drinking water to domestic and commercial customers in Antofagasta region under a 30-year concession.

Around 162,000 residents in northern Chile, which comprises of the towns of Antofagasta and Calama, are served by ADASA.

Antofagasta CEO Diego Hernandez said, "This sale will allow Antofagasta to focus even more closely on its mining business and to advance its various development projects, whilst reinforcing the strength of our balance sheet."

The sale was conducted through a competitive process.

Reuters cited an anonymous London-based analyst as saying that the sale "took the market by surprise."

The analyst was quoted by the news agency as saying: "There’s a track record of returning cash to shareholders … or the money could be used for organic growth or to look at M&A opportunities, when (copper) prices are more depressed."

Based in Medellin, Colombia, EPM is a provider of electricity, gas, water and sanitation services for more than 20 million people in the country as well as across El Salvador, Guatemala, Mexico and Chile.