The biggest copper producer in India, Sterlite Industries Ltd., agreed to purchase the bankrupt copper miner Asarco LLC for $1.1 billion in cash and a $600-million note.
Initially, $2.6 billion was offered by Sterlite to buy Asarco, but that was withdrawn in 2008 by Sterlite due to the falling price of copper at the time.
Asarco welcomed the deal put forth by Sterlite after a long negotiating process. In a statement chief Executive Officer of Asarco Joseph F. Lapinsky said, “It is satisfying to see months of negotiations finally bear fruit.”
Tucson, Arizona, based, Asarco, chose to file for bankruptcy in 2005 after realizing that it could not pay the over $7.9 billion in claims against it. The majority of those claims stemmed from the environmental and human damages wrought by asbestos-based products from an arm of the Asarco company. The original offer of $2.6 billion from Sterlite would have settled the $7.9 billion in claims against Asarco for $2.1 billion, but the new offering by Sterlite did not specify the amount for which it would settle the environmental and asbestos claims against Asarco.
The falling copper prices that prompted the withdrawal of the initial $2.6 billion offer from Sterlite also affected the asbestos claimants against Asarco. Before 2008, the parent company of Asarco, Grupo Mexico SAB, ensured that creditors and claimants would get a $2.7 billion settlement, but like the first Sterlite offering, this was pulled from negotiations when the price of copper fell late in 2008.
Asbestos is a known carcinogen that once was used extensively in construction materials. Its use has now been banned in new construction in the United States, but asbestos-related diseases take decades to develop, and those exposed to asbestos are not diagnosed with cancer until 20 or 30 years later. Those who used the asbestos products produced by the Asarco unit in the middle of the 20th century are now finding, in the early 21st century, that they have cancer, a disease which could have been prevented by a company which knew in advance of the dangers of its asbestos products.