Here we go again: Anglo, Codelco talks extended

Here we go again: Anglo, Codelco talks extended......just gotta be good for RDK re turmoil around the world for any budding projects from Copper Alley in Arizona besides theirs.
Cecilia Jamasmie | July 12, 2012
 

London-based Anglo American (LSE:AAL) and Chile's state-owned Codelco have not come to an agreement, said the world’s largest copper producer Thursday in response to several media inquires about the alleged resolution of their dispute over copper assets in the South of Chile. Instead they have agreed to extend the talks until mid August.

Investors are closely watching this case to see if the parties can finally achieve a deal before the new deadline expires. If not, then they will go back to court and extend the dispute for years, damaging their reputation and likely affecting their respective business.

Reuters is reporting that Japan's Mitsubishi Corp. might sell down its stake in the disputed assets, helping the parts to end their bitter dispute.

As a State-owned company, Codelco’s potential defeat would be a bitter political blow with uncertain ramifications.

Anglo, on the other hand, faces pressure from its shareholders as it needs to prove the recent $2.8 billion invested in the Los Bronces copper mine, one its Sur division’s operations, won’t be in vain.  If Codelco wins Anglo would lose its 100% ownership as a consequence.

Since 2011, the world's largest copper producer and Anglo are fighting over contracts affecting the diversified miner’s division in the South of Chile, home for the world’s fifth largest copper mine.

In late May, the parties agreed to put their legal battle on hold until June 22 to explore the chance of reaching an agreement. A day after this announcement, Codelco CEO Diego Hernandez resigned claiming “personal reasons,” which gave room for speculations.

The clash between Anglo American and Codelco goes back to November last year, when the copper giant decided to exercise an option and Anglo American responded by selling a 24.5% stake in its southern Chilean division to Japan’s Mitsubishi Corp. for $5.39 billion. By doing this, Anglo undermined Codelco plans to exercise its option, something that the copper miner could only have done in January.

A failed attempt by Codelco to force Mitsubishi to hand over the particulars of the deal in December drove the Chilean company back to the courts by formally informing Anglo American that it was “exercising its legal option” to buy the contested 49% in Anglo Sur.

If an agreement is not possible, then Chilean courts will have to settle the conflict.

Anglo American is one of Chile’s largest foreign investors.

Cecilia Jamasmie

Email: cjamasmie@mining.com

Cecilia Jamasmie on  

Cecilia Jamasmie is one of the news editors at MINING.com. With more than 12 years of experience in print media, TV, online media and public relations, Cecilia is now the Latin American news editor. She holds a Master of Journalism (MJ) from the University of British Columbia, Canada, and she is now developing a Spanish version of MINING.com to be launched soon.