Miner Antofagasta has sold its water business in Chile for almost $1bn, strengthening its balance sheet as it tries to develop various projects amid volatile copper prices.

The UK-listed mining group is almost wholly reliant on its Chilean copper output but also owned the water utility company in its home region of Antofagasta in northern Chile. The utility contributed 4 per cent, or $64m, of the group’s $1.6bn of pre-tax profits last year.

On Thursday, Antofagasta said it would sell the business to Colombia’s Empresas Públicas de Medellín for about $960m before taxes and transaction costs. The utility was operated under a 30-year concession.

Antofagasta’s shares rose almost 4 per cent on the announcement.

The sale highlights miners’ willingness to shed non-core assets to try to withstand a commodities downturn that has deepened over the past three years. Benchmark copper prices are down more than 40 per cent from a peak in 2011.

Anglo American is selling or exiting copper, coal and platinum assets as well a stake in its Tarmac joint venture with Lafarge. BHP Billiton is spinning off a suite of smaller business divisions into a separate company, subject to a shareholder vote next month, while Barrick Gold is considering a disposal of a large copper mine that would increase its focus on precious metals.

Diego Hernández, Antofagasta’s chief executive, said the water sale would allow it to “focus even more closely on its mining business and to advance its various development projects, whilst reinforcing the strength of our balance sheet”.

Antofagasta plans to spend about $1.3bn in capital projects this year after $1.6bn of capex in 2014. The company is in the middle of a sequence of so-called “brownfield” expansions — those that build on existing mines and infrastructure — at its Chilean operations, with a new mine, Antucoya, on the cusp of starting production.

Analysts at Citi said the water deal “looks like a good price” compared with their view that the net present value of the business was $290m. “Valuation on the sale is 13 times ebitda, a significant premium to Antofagasta’s corporate multiple of eight times,” they said.

EPM is the municipal utility in Colombia’s second city. It already operates in Chile as well as in El Salvador, Guatemala and Mexico.

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