Court will decide if Codelco, Anglo deadlocked – Chile President
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|By: Reuters
24th November 2011
Updated 1 hour 54 minutes ago
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SANTIAGO – Chile's courts will decide an option contract spat between state copper giant Codelco and global miner Anglo American if they fail to negotiate a deal, PresidentSebastian Pinera said on Wednesday.
Anglo shocked world No. 1 copper producer Codelco and investors this month when it sold a 24.5% stake in its southern Chilean copper properties to Japan's Mitsubishi Corp for $5.4-billion, undermining an option Codelco had to buy a 49% stake.
Codelco has appealed against the sale to Chilean courts, and the two sides are gearing up for a likely protracted legal battle.
"The government is aware of and supports the moves Codelco is making to defend its legitimate interests," Pinera said in a speech at an annual mining sector dinner. "The solution can come by one of two paths."
"If they do not reach an agreement, given Chile is a land with a rule of law, it will be the Chilean courts which must resolve these differences," he added.
Codelco's CEO Diego Hernandez last week warned that Anglo American had mortgaged its future in Chile with its preemptive stake sale, but both sides have since made overtures towards negotiating.
"We are not in a hurry," Hernandez said on Wednesday. "You never announce negotiations through the press unless you want them to fail."
Negotiation could be advantageous for both mining giants, legal experts say, though increasingly difficult as the firms have hardened their stances over the long-standing option.
Codelco insists it still has the right to exercise an option to buy a 49% stake in Anglo American Sur, which includes the flagship expansion project Los Bronces, El Soldado mine, the Chagres smelter and Los Sulfatos and San Enrique Monolito exploration projects.
Codelco said in October it had secured a $6.75-billion bridging loan from Japan's Mitsui & Co to allow it to exercise its option.
Edited by: Reuters
Here is what is at stake:
Here is what is at stake:
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Anglo to more than double output from Chile copper mine
23rd November 2011
Updated 1 hour 58 minutes ago
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JOHANNESBURG (miningweekly.com) − Global mining giant Anglo American expects the output from its expanded Los Bronces copper mine to more than double in the first three years of full production from its existing output of 221 000 t/y.
Announcing the delivery of first copper production from the Los Bronces expansion project, CEO Cynthia Carroll said in a statement that the opencut copper and molybdenum mine would be the world’s fifth-largest copper mine at peak production levels.
Los Bronces has reserves and resources that support a mine life of over 30 years and with further expansion potential.
The miner expects to produce 233 400 t of copper this year, up from 2010’s 221 000 t.
John Mackenzie, CEO of Anglo American’s copper business, said there was a 12-month ramp-up period ahead until full production was reached.
During this time, he explained, the company would increase processing plant throughput from 61 000 t/d to 148 000 t/d of ore.
"We have delivered this major expansion of Los Bronces on schedule owing to the hard work and dedication of 16 000 people who have been working on the project over the last three years,” Mackenzie said.
Further, Carroll said apart from the existing copper operations in Chile, Peru and the US, exploration activities were under way in several other geographies.
Further, Carroll said apart from the existing copper operations in Chile, Peru and the US, exploration activities were under way in several other geographies.
Earlier this month, Anglo American sold a 24.5% stake in its subsidiary Anglo American Sur, which includes the flagship Los Bronces mine, to Japan’s Mitsubishi Corporation for $5.39-billion.
State-owned copper miner Codelco is gearing up for a legal battle as it planned to exercise its option to buy a 49% interest in the Sur mining complex in January 2012.
Anglo maintained that the transaction was fully compliant with the option agreement between Anglo American, certain of its affiliates and Codel
