[miningmx.com] — CODELCO, Chile’s state-controlled base metals miner, said it would sue Anglo American in order to enforce its option agreement over Anglo American Sur, and labelled the UK-listed firm’s actions as “erratic”.
In a highly emotional press statement, Diego Hernandez, CEO of Codelco said: “I never would have expected this behaviour from a world class company such as Anglo American”. The dispute would “severely compromise the interests of shareholders in the short and medium term”, he said.
The dispute between the companies relates to an option agreement over 49% of the shares in Anglo American Sur, a company which houses important copper assets in Chile which Anglo American prizes including the Los Broncos copper mine.
Codelco announced in 2011, ahead of its option period, which is in January, that it would move to take the shares and raised funding through Mitsui Metals.
However, Anglo pre-emptively sold 24.5% in Anglo American Sur to Mitsuibishi, and later filed court action saying Codelco had no right to any of the shares as it was in breach of contract.
Codelco’s lodged its suit with the Chilean courts and further filed an action with the Santiago Appeals Court aimed at discovering details of Anglo American’s contract with Mitsubishi. This was to “enable Codelco to explore taking further legal action to seek the annulment of the contract between Anglo American and Mitsubishi”, Codelco said in its statement.
Codelco said Anglo American had intended to “ignore and annul Codelco’s right to purchase its stake in AA Sur (Anglo American Sur)”.
This latest development is a clear sign that negotiations between the two parties had all but broken down. Shares in Anglo American closed 3.2% higher in London before Codelco’s announcement.
If successful in its suit, Codelco will have the Chilean Court order Anglo American to pay damages to Codelco for breach of contract. This would include the payment of dividends from the shares Codelco has the right to own under its option agreement.
Commenting on Anglo American’s suit against Codelco, the Chilean company said it was “wholly unfounded and is simply a manoeuvre to attempt to default on its obligations under the option agreement”.
“We regret that Codelco has been forced to take legal action. However, this is the only possible option when a counter party is acting erratically and in clear violation of the contracts,” said Hernandez.
“I never would have expected this behaviour from a world class company such as Anglo American. Anglo American’s actions severely compromise the interests of its shareholders in the short and medium term.”
An earlier injunction filed on November 24 intended originally to protect Codelco’s right to purchase the 49% stake in Anglo American Sur was withdrawn, the company said.