* BHP favours large scale, long-life assets
* BHP agrees cash payment of $230 million (Adds EMR comments)
LONDON, June 19 (Reuters) - BHP said on Tuesday it has agreed to sell the Cerro Colorado copper mine in Chile to Australian private equity fund EMR Capital.
The world's biggest listed miner said it agreed a cash deal worth $230 million in addition to $40 million in proceeds from the post-closing sale of the mine's copper inventory and a contingent payment of up to $50 million to be paid in the future, depending on copper price performance.
Sources had said BHP hired Citi early in 2017 to sell the asset, which was then valued at up to $800 million.
The deal is expected to close in the fourth quarter of 2018, BHP said in a statement.
BHP and other major miners are keen on copper as a mineral expected to be in high demand for both the traditional economy and for electric vehicles, but its preference is for large-scale projects.
"We look forward to adding Cerro Colorado to our portfolio as copper is one of our four core commodities and offers excellent demand and supply fundamentals for decades into the future," EMR chief executive officer Jason Chang said in a statement.
Cerro Colorado, located in the Tarapacá region, the extreme north of Chile's copper belt, yielded 65,000 tonnes of copper in fiscal 2017. BHP's flagship mine Escondida, which also is in Chile, yields more than 10 times that amount annually.
The Cerro Colorado mine has government approval to operate until 2023 but that could be extended. (Reporting by Clara Denina, Dasha Afanasieva, Barbara Lewis; additional reporting by Melanie Burton; editing by Louise Heavens and Richard Pullin)