Freeport-McMoRan Inc (NYSE:FCX) has announced that it will trade 13% of its ownership interest in Morenci unincorporated. The stake will be passed on to Sumitomo Metal Mining Co., Ltd for a $1 billion consideration.

Richard C. Adkerson, the president and chief executive officer of Freeport-McMoRan, made the recent announcement where he revealed that his firm is happy to expand the Morenci partnership with Sumitomo. He added that the new agreement is one of the company’s major steps towards its goal of restoring the balance sheet by speeding up the debt reduction. It is also a strategy towards maintaining a portfolio of high-value resources and assets.

During the announcement, Mr. Adkerson also said the Morenci partnership with Sumitomo can be traced back thirty years ago, and the two firms are sure that the joint operations will continue in the future. The association between the two companies is strategically positioned towards continued success through a mix of smart cost structures, considerable resource position and reserves that promise longevity.

FCX currently owns 85% of the Morenci joint venture while Sumitomo owns 15%. Once the transaction is complete, FCX will remain with 72% of the venture while Sumitomo’s stake will be bumped up to 15%. The agreement is expected to come to a completion in the middle of the year once all conditions are met and approval is issued by the regulatory bodies. FCX plans to use the revenue from the sale to fund the debt under its bank term loan. The company anticipates $550 million in gains from the deal. Further to that, it will reduce its tax obligation on the deal by balancing out its books through the losses.

The gains come from the $2.2 billion generated by the 85% stake in the Morenci mines and costs worth $1.5 billion in production and delivery costs. FCX received 900 million pounds of copper as part of the 85% share of the total copper recovered from the mines in 2015.