[miningmx.com] — CODELCO on Thursday described the deal between
Anglo American and Japan’s Mitsubishi over Anglo American Sur as “illegal,’ following
the release of the sales contract the previous day.
In a statement, the Chilean copper producer said the deal for 24.5% of Anglo Sur
was an attempt to block an option it holds over 49% of the company, which includes
the world-class Los Bronces copper mine. Anglo has said the sale means that the
historic option cannot be exercised in full.
The LSE and JSE-listed diversified miner was ordered to release the contract
documents earlier this week by a Chilean court.
According to Codelco’s top lawyer, Pedro Pablo Gutierrez, both Anglo and Mitsubishi
were fully aware that the sale undermined the state-owned company’s rights over
the business, and the contract includes clauses that make Anglo responsible for
Mitsubishi’s legal defence in any legal bid by Codelco to quash the deal.
If any such bid is successful, the London-listed mining firm is liable to pay Mitsubishi
damages to the equivalent of up to 110% of the $5.39bn that the Japanese
company agreed to pay for the shares.
“This is extremely serious information, which confirms the malicious actions of Anglo
American and Mitsubishi; conduct that is prohibited and punishable under Chilean
Law, irrespective of where the contract was signed,’ charged Gutierrez.
Codelco says the option, which dates back to the privatisation of the mines under
the military government of General Augusto Pinochet, allows it to buy a 49% stake in
Anglo American Sur for around US$6bn, or around half its estimated market value.
But the contract makes it clear that if Anglo sells shares to a third party, the stake
liable to the option would be reduced.
Codelco’s complaint is that Anglo only moved to sell the stake to Mitsubishi once the
Chilean firm had made clear its intention to exercise the option. A confidentiality
agreement between the UK and Japanese companies – ahead of negotiations – was
signed just four days after Codelco unveiled a US$6.75bn financing deal with
Mitsubishi’s rival Mitsui to fund the acquisition.
In a terse response, Anglo American’s top executive in Chile, Miguel Angel Duran,
denied the accusations.
“Anglo American has never undermined or tried to undermine Codelco’s rights. [and]
the company squarely rejects any accusation that Anglo American has acted
fraudulently,’ he said.
In particular, Duran noted that the contract places no ban or restriction on Anglo
American selling shares in its subsidiary outside the period in which the option may
be exercised, stipulated as the month of January once every three years.
Taking the fight to Codelco, Duran said it was the Chilean firm who had acted in
breach of the articles of the contract; by attempting to exercise the option ahead of
the window, in order to prevent Anglo from exercising its legitimate rights.
“Codelco is trying today to criticise Anglo American for breaching a supposed right
that does not exist. It is this attempt to exercise the option prematurely that has
Anglo American and Codelco embroiled in a conflict,’ he said.
Differing legal approaches drive the head-on collision between the two. While Anglo
says its position is supported by the details of the contract, Codelco counters that
these have little weight if they make it impossible for the contract to fulfil the
purpose for which was designed: to allow the state to take back a stake in the
assets.
