[miningmx.com] – ANGLO American’s South American copper producing
ambitions were dealt a double boost today after Peru ratified plans for the proposed
$3bn Quellaveco mine while Chile’s Codelco extended efforts to settle a dispute
involving Los Broncos mine.
According to Reuters, Peru’s government brokered a deal between its regional
Moquegua government and Anglo American which allows Quellaveco to proceed. The
development is remarkable because Peru recently declared a 30-day state of
emergency after five people died in protests over development of Newmont Mining’s
$5bn Conga mine.
Quellaveco is slated to produce 220,000 tonnes of copper a year, about a fifth of 2011
output in Peru, the world’s second largest copper producer, Reuters said. The project’s
environmental impact study was approved years ago, but community opposition has
delayed its development.
In terms of the deal, Anglo is expected to pay $370m to local communities during the
mine’s 30 years of operation. The environmental impact study produced by Anglo was
approved years ago. Reuters said the deal was a victory for Oscar Valdes, Peru’s
prime minister who has been accused of being too soft on international mining
companies.
As for the world’s largest copper producer, Codelco, a dispute between it and Anglo
American could be on the verge of resolution. The Chileans and Anglo have agreed to
extend out of court negotiations until mid-August amid speculation, not confirmed by
the companies, that Japanese trading house Mitsubishi might be willing to come to the
rescue.
The dispute turns on ownership of Anglo American’s Minera Sur asset in Chile. The
asset consists of three copper mines, including Los Broncos, which are expected to
produce between 480,000 tonnes to 540,000 tonnes of copper in 2014 – a near
doubling over the 268,000 tonnes in 2011. Codelco tried to exercise a long-standing
option for 49% of Minera Sur and on-sold it to Mitsui only for Anglo to conclude a
quick-fire counter deal with Mitsubishi at a premium to the Mitsui deal.
According to Reuters, Mitsubishi could now cede part of its stake in the disputed
Chilean assets in order to help defuse a bitter row between Anglo American and
Codelco.
“It is possible Mitsubishi could sell some of its stake,” one of the sources familiar with
the matter told Reuters. Mitsubishi was taking a long-term view of the matter and was
partial to a compromise. The outcome may be that Codelco becomes the second
largest shareholder in Minera Sur, an outcome that could be achieved with Mitsubishi
selling down only a small stake.
Chilean newspaper La Tercera said Mitsubishi could cede five percent of its 24.5%
stake in the asset to make room for Codelco to buy 29.5%. Codelco dismissed reports
on the details of a deal as “journalistic speculation”.
Codelco, Mitsubishi and Anglo American all declined to comment on a potential
solution involving Mitsubishi. “Discussions are confidential and ongoing,” an Anglo
spokesman said.
