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Timeline
Asarco since its purchase by Grupo Mexico:
• October 1999: Asarco announces it will be bought by Grupo Mexico in a deal valued at $2.25 billion. In accepting Grupo Mexico's offer, Asarco turned down an earlier offer from Phelps Dodge.
• January 2003: Grupo Mexico overcomes U.S. government objections and buys Asarco's 54 percent stake in Southern Peru Copper Corp. — a company that ran two mines and related operations in Peru — for $765 million. As part of the deal, Asarco was to set aside $100 million to cover environmental liabilities.
• July 2005: More than 1,500 Asarco workers in Arizona and Texas go on strike.
• August 2005: Asarco files for bankruptcy in Corpus Christi, Texas, citing environmental and asbestos liabilities, a recent credit-rating downgrade and the strike.
• November 2005: Union workers approve a new contract and go back to work.
• December 2005: A bankruptcy judge appoints a board to oversee Asarco, giving Grupo Mexico only one seat on the board and minimizing the parent company's influence.
• February 2007: Asarco sues Americas Mining Corp., Grupo Mexico's subsidiary, over the sale of Asarco's majority interest in the Peruvian company, which is now called Southern Copper Corp. Asarco argues that it was paid too little and that the transfer was intended to take Asarco's most valuable asset while leaving all its liabilities.
• May 2008: The trial over the stake in Southern Copper Corp. begins in Brownsville, Texas, and is scheduled to unfold over five weeks.
• Saturday: Mumbai, India-based Sterlite Industries Ltd. announces it has won an auction and will purchase Asarco's assets for $2.6 billion. The sale must be approved by the Bankruptcy Court.

Business

Tucson's Asarco to sell assets to India firm

By Gabriela Rico
ARIZONA DAILY STAR
Tucson, Arizona | Published: 06.01.2008
Tucson-based Asarco LLC signed an agreement Saturday to sell all its Southern Arizona mines and other assets to an India-based company, Sterlite Industries Ltd.
Sterlite, a subsidiary of London-based Vedanta Resources, will buy the operating assets of Asarco for $2.6 billion, the two companies announced in a statement Saturday.
The agreement is subject to the approval of the U.S. Bankruptcy Court in Corpus Christi, Texas. If approved, the sale will likely conclude Asarco's Chapter 11 bankruptcy case, allowing it to emerge from bankruptcy reorganization after nearly three years.
Asarco is Southern Arizona's 20th-largest employer, according to this year's Star 200 survey of employers. It had 2,185 full-time-equivalent employees and an area payroll of $103 million. The company recently consolidated its headquarters offices at 5285 E. Williams Circle.
Asarco operates the Mission Mine, near Sahuarita; the Silver Bell Mine, near Marana; and the Ray Mine, near Kearny, as well as a smelter at Hayden. It also has a refinery and other plants in Texas. All will become the property of Sterlite if the acquisition is approved.
For 2007, Asarco had total revenues of about $1.9 billion, according to the company statement. It produced 235,000 tons of refined copper last year. Asarco's mines currently have estimated reserves of about 5 million tons of contained copper.
Formerly known as American Smelting and Refining Co., Asarco has been in business for more than 100 years. It is the third-largest copper producer in the United States.
Sterlite said it would assume operating liabilities but not Asarco's liabilities for asbestos and other environmental claims for closed operations. Asarco faces huge liabilities — estimated in the billions of dollars — for the cleanup of polluted mine sites and waterways, and in asbestos claims.
Asarco has assumed responsibility at more than 100 sites across the United States for environmental claims and has been settling with states and the federal government over the past year. It is required to settle or liquidate the claims before it can emerge from bankruptcy protection.
"We are delighted to have reached agreement on this important acquisition, which is a significant milestone for our group," Anil Agarwal, Sterlite's chairman, said in a statement.
The acquisition also is a milestone for the local copper producer, said Joseph F. Lapinsky, Asarco's chief executive officer.
"Reaching this agreement with a world-class mining company is a giant step forward in our quest to successfully emerge from Chapter 11," he said in a statement.
The companies characterized the merger as "a logical and strategic fit."
The sale agreement resulted from a process in which Sterlite and several other entities participated over many months. Bidders submitted offers in late April, and the selection of the highest and best bid occurred on May 23. However, the identity of the winning bidder was not revealed until Saturday.
Sterlite was one of four companies competing to buy Asarco's assets. Copper prices are on a years-long upward run and climbed to a record in April. Producers are pursuing takeovers as surging costs make it cheaper to acquire rivals than to build mines.
Earlier this week, Asarco's existing parent company, Grupo Mexico, acknowledged that it had lost out in the bidding and complained it was unfair that it was being forced to bid competitively for a company it owned.
However, Grupo Mexico lost its control over Asarco in December 2005, when a bankruptcy judge appointed a board to oversee Asarco on which Grupo Mexico had only minority representation.
The selection process followed a procedure supervised by Asarco's creditors and approved by the U.S. Bankruptcy Court. An independent court-appointed examiner monitored the bidding process.
● Bloomberg News and The Associated Press contributed to this report. ● Contact reporter Gabriela Rico at grico@azstarnet.com.
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