Harmony Gold, South Africa’s largest gold producer by volume, has agreed to acquire Australian mining company Mac Copper Ltd in a deal valued at approximately $1.03 billion, marking a strategic move to expand its copper portfolio.

The Johannesburg-based company is offering $12.25 per share in cash, which represents a 20.7% premium over Mac Copper’s closing price on the New York market last Friday. Mac Copper’s board has given unanimous approval to the offer.

Mac Copper’s CSA Copper mine in New South Wales produced 41,000 metric tons of copper last year. Harmony Gold highlighted that acquiring an operational mine will generate immediate cash flow.

The transaction will be funded through a combination of Harmony’s internal cash reserves and a loan facility of $1.25 billion. Following the announcement, Harmony’s shares dropped by 6.3% in early trading in Johannesburg.

This marks Harmony’s second acquisition of copper assets in Australia, following its purchase of the Eva Copper project in Queensland in 2022, which is expected to produce between 55,000 and 60,000 metric tons annually starting in 2029.

Additionally, Harmony has been exploring development options for the Wafi-Golpu gold-copper project in Papua New Guinea, which it co-owns with Newmont Corp.

South African mining firms, including Harmony, are increasingly seeking international assets due to rising costs and geological difficulties in operating some of the deepest gold mines domestically.

Harmony intends to leverage its underground mining expertise from South Africa to enhance operations at the CSA Copper mine.

The company’s CEO, Beyers Nel, described the acquisition as an important step in Harmony’s goal to become a leading global producer of both gold and copper.