Anglo, Codelco Agree to Talks on Resolving Chile Copper Dispute
By Carli Cooke and Matt Craze
Anglo American Plc (AAL) and Codelco, Chile’s state-owned mining company, agreed to talks to try to resolve a dispute over ownership of Anglo’s local unit and asked a court to suspend proceedings.
“We welcome this opportunity to re-engage with Codelco and explore whether a solution may be achievable,” Anglo Chief Executive Officer Cynthia Carroll said in a statement. “Should this prove successful, it will enable the parties to overcome their current legal dispute,” Anglo said.
Codelco has sought to exercise an option dating from 1978 to buy 49 percent of Anglo American Sur. Anglo, which last year completed a $2.8 billion expansion at the unit’s Los Bronces copper mine, agreed in November to sell 24.5 percent to Mitsubishi Corp. (8058) for $5.39 billion. Santiago-based Codelco says that was an attempt to block its option.
“Anything that avoids a two- or three-year court dispute has got to be positive,” Des Kilalea, an analyst at RBC Capital Markets said by phone from London. “The key is, just because they’re talking, we shouldn’t necessarily believe that there will be an agreement. They are very far apart — this is like two people having gone to the divorce court now getting married again.”
Anglo advanced 3.7 percent to 2,099.50 pence as of 2:20 p.m. in London trading, the biggest intraday gain since April 17.
‘Open to Agreement’
“We will explore once again if we can find areas of consensus with Anglo American to overcome this controversy,” Codelco Chief Executive Officer Diego Hernandez said in a separate e-mailed statement.
The two companies requested the suspension of legal proceedings at the 14th Civil Court of Santiago until June 22, Anglo said.
“Codelco has always been open to an agreement if it was in the company and owner’s interests, who are all Chileans,” Codelco Chairman Gerardo Jofre said in the statement.
Anglo said it had “from the outset, been consistently in favor of discussing a commercial solution that takes into account the interests of both parties.”