[miningmx.com] — CODELCO and Anglo American both claimed to have landed clean blows on each other in their increasingly bitter legal battle for a stake in the latter’s Chilean subsidiary, Anglo American Sur, as hopes of an out-of-court settlement have faded considerably.
On Friday, the 14th Civil Court in Santiago froze a 49% stake in Anglo Sur as a precautionary measure to protect Codelco’s right to acquire the shares.
Combined with Anglo’s $5.4bnsale of a 24.5% stake in the firm to Japan’s Mitsubishi last November, it could leave the London-listed firm owning a minority stake in what had been one of its most attractive assets, the lawyer noted.
Anglo Sur owns the El Soldado and Los Bronces mines, as well as the Chagres smelter, all in central Chile.
“This is an important step forward in our legal strategy,’ said Codelco’s top litigator Pedro Pablo Gutierrez. “It ensures that if we win the case tomorrow, we will be able to enforce the sentence.’
Codelco was also pressuring in the courts to publish the contracts behind the Mitsubishi transaction in the hope that it can be quashed.
Meanwhile, Anglo American was celebrating a January 12th decision by the Santiago Court of Appeals to award its costs in its bid to overturn an injunction brought by Codelco on further sales of shares in Anglo Sur following announcement of the Mitsubishi deal. Codelco had dropped the injunction after formally informing Anglo American of its decision to exercise the option earlier this month.
Anglo said the decision showed that Codelco had acted “illegitimately’ by using the constitutional protection over by the ban to further its own bid for the shares.
“This of courses backs up Anglo American’s suit against [Codelco],’ the company said in a statement from its Santiago offices.
Anglo is suing Codelco for blocking the option, claiming the state-owned mining firm had breached the terms of the 30 year-old contract by attempting to exercise it ahead of the legal window.
While both sides are claiming victory in this first round, neither seems closer to landing a knock-out blow on its opponents and the consensus remains that the legal wrangle is set to run for months, if not years.
Despite pressure from Chilean authorities and other industry players, signs of a friendly agreement, touted by both sides in the first weeks of the spat, seem more distant.
With both sides seeing itself ahead in the courts, they would rather trust their lawyers than each other.
As Codelco boss Diego Hernandez surmised hours before the freezing of the Sur stake, the chances of an agreement are “very slim’.
“Unless one of the parties radically change its position, but looking at the legal proceedings, that that looks unlikely,’ he said.
