[miningmx.com] — Chilean copper giant Codelco said on Monday it had filed a lawsuit in a Chilean appeals court against Anglo American in a bid to prevent the global miner from selling further stakes in southern properties Codelco was looking to buy into.
Anglo American said in a statement later on Monday it would oppose Codelco’s lawsuit in the same court, setting the stage for a legal battle between the two mining titans.
Anglo shocked Codelco and investors on Wednesday when it announced that it had sold a 24.5% stake in its southern Chilean copper properties to Japan’s Mitsubishi Corp for $5.4bn. That move signaled an aggressive stance in negotiations with Codelco, the world’s top copper producer.
Codelco insists it has an option to buy a 49% stake in Anglo American’s south Chile properties, known as Anglo American Sur, while Anglo says that Codelco can now only buy a 24.5% stake after the sale.
“We want to avoid Codelco’s right to buy shares in Anglo American (Sur) from being violated,” Codelco’s lawyer Pedro Pablo Gutierrez told reporters after filing the suit.
Codelco said the suit does not target Mitsubishi. “That remains to be studied in the future,” Gutierrez said. Experts say the legal battle could ultimately end up in
Chile’s supreme court, and Codelco’s CEO Diego Hernandez had previously said a legal battle could take up to four years to be resolved.
Anglo American has said it is keen to avoid a legal battle over the properties, which include the flagship expansion project Los Bronces, El Soldado mine, the Chagres smelter and Los Sulfatos and San Enrique Monolito exploration.
Chief Executive Cynthia Carroll said in interviews published in Chilean newspapers last week that Anglo was willing to negotiate and was open to a deal for Codelco to take a smaller stake in Anglo American Sur – but reiterated it would not sell 49% of its assets.
She said she had repeatedly asked Codelco’s Hernandez for his thoughts on the option, and that they had never really had a two-way dialogue. Hernandez says he clearly told Anglo American of Codelco’s plan, and says the mining company has
breached good faith and sold the stake pre-emptively.
Codelco said in October it had secured a $6.75bn bridging loan from Japan’s Mitsui & Co to allow it to exercise its option and had cautioned Anglo American it must
honour the pact.
Chile is a significant part of Anglo’s operations and Anglo American Sur accounted for 41% of its copper production in 2010. Anglo has invested around $2.8bn to develop Los Bronces.
