[miningmx.com] — ANGLO American found itself on the back foot on Monday in its dispute with copper giant Codelco, after a Chilean court ordered it to hand over the sale contract relating to a stake in Anglo American Sur to Japan’s Mitsubishi.
The Second Civil Court of Santiago gave the London-listed mining group five working days to present the document or appeal the ruling.
Codelco hopes to use the documents to quash the $5.4bn transaction which, according to Anglo American, has reduced the 49% stake over which the Chilean state miner can exercise an option.
Speaking hours after the ruling, Codelco CEO Diego Hernandez said the decision was important given the role that the sale to Mitsubishi played in Anglo’s strategy to prevent the Chilean firm from exercising the option.
Codelco claims the option, which date back to the privatisation of the mines under the military dictatorship of General Augusto Pinochet, gives it the right to pay around $6bn for the stake in Anglo Sur -around half the estimated market value.
Anglo Sur has capacity to produce more than 500,000 tonnes of copper annually, following the expansion of its flagship Los Bronces mine last year.
Hernandez has raised doubts about the validity of the Mitsubishi transaction, just two weeks after Codelco said it would exercise the option, which falls due once every three years in the month of January.
Some fear that the deal could be illusory, allowing Anglo to reduce its stake in the Sur business, but obliging Mitsubishi to sell back the disputed shares once the danger of the option window has passed.
If Anglo is caught using such sharp practises, the company would be in very hot water indeed, said Juan Carlos Latorre, a deputy from the opposition Christian Democrat Party.
The ruling comes just days after another court froze a 49% stake in Anglo Sur in order to protect Codelco’s right to purchase the shares.
With the legal fight seemingly going its way, Codelco no longer feels under any pressure from the Chilean authorities to reach a negotiated settlement with its privately-owned rival.
“So far the legal proceedings have served only to strengthen Codelco’s position so I don’t think this is the moment to consider negotiations,’ said Latorre.
“We must always be open [to talks] but clearly today the legal option has the upper hand,’ Hernandez said at the company’s Santiago offices.
