Asarco obtains court OK of $11.5 million purchase of remaining interest in Copper Basin Railway

By Jennifer Lanning Drey

Eugene, Ore., Sept. 12 - Asarco LLC obtained court approval to buy the remaining shares of Copper Basin Railway, Inc. from Rail Partners II, LLC for $11.5 million, according to an attorney.

The ruling came Tuesday from the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, prior to the sale, Asarco owned 45% of the Copper Basin stock, and Rail Partners II, LLC owned the remaining 55%.

Copper Basin transports sulfide copper ore and copper concentrates from Asarco's Ray Mine to its Hayden Smelter.

When requesting the approval, Asarco said its business is the source of more than 95% of Copper Basin's freight revenue.

In 2004, Rail Partners exercised its put option that requires Asarco to buy its shares in Copper Basin, but Rail Partners and Copper Basin could not agree on the stock's fair market value.

As a result, Rail Partners sued Asarco for breach of the put option, seeking $11.3 million in damages.

In August, Rail Partners' owner notified Asarco that he is selling Rail Partners and provided Asarco with a letter of intent for the purchase of Copper Basin.

Asarco elected to assume the stockholders' agreement and purchase Rail Partners' 55% interest in Copper Basin in order to avoid a disruption in freight service or an increase in prices that may have resulted from the sale of Copper Basin, according to the previously filed motion.

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9, 2005. Its Chapter 11 case number is 05-21207.

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