Codelco has signaled it is willing to come to a financial settlement with Anglo American in a spat over a prized mine in Chile, but the state copper producer said any deal would not come cheap, the Financial Times reported on Friday.
Codelco’s chief executive, Diego Hernández, said the company could buy less than the full 49 percent 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, the FT reported.
“Today, as Codelco, we have two alternatives – to reach an agreement with Anglo American that recognises our rights and our legitimate aspirations in accordance with the expectations we have, and if we don’t reach an agreement, legal action,” he was quoted as telling the paper in an interview.
He said discussions needed to be held about the exact nature of the deal which would satisfy Codelco, the FT reported.
“We don’t have preconceived ideas. But certainly, the 49 percent has a value,” he said, according to the article.
Anglo shocked Codelco — the world’s No. 1 copper producer — and investors earlier this month when it sold a 24.5 percent 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 percent stake.
Codelco, which is wholly owned by the Chilean government, insists it still has an option to buy a 49 percent stake in Anglo American Sur, while Anglo says that potential stake has been reduced to 24.5 percent after the stake sale to Mitsubishi.
Codelco has appealed against the sale to Chilean courts, and the two sides are gearing up for a likely protracted legal battle. Earlier this week Chilean President Sebastian Pinera said the country’s courts would decide the option contract spat between the companies if they failed to negotiate a deal.
While a financial settlement could be expensive, Hernández said the option value was “even a bit higher than the commercial value” given the synergies collaboration between the two companies could offer, the FT reported.
Some estimates suggest the two companies could save up to 12 percent in costs via synergies at their neighbouring Los Bronces and Andina mines, according to the article.
“So it is important to us to be partners,” Hernández is quoted as saying. “But a relevant partner, with weight, not one per cent,” he added, according to the article.
Anglo and Codelco were not immediately available for comment.
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