ANGLO American today announced plans for a joint mine plan with Codelco in Chile that will see the partners produce 2.7 million tons of additional copper over 21 years from 2030.
A memorandum of understanding has been signed between Anglo’s 50.1% owned subsidiary Anglo American Sur and Codelco in which they will optimise the mining and processing capacity of their neighbouring Los Bronces and Andina mines respectively. The costs and liabilities of the joint mine plan will be shared between the parties.
Anglo CEO Duncan Wanblad said the agreement with Codelco aimed at building on Anglo’s existing plans to increase copper production 30% to one million tons a year by 2030. “Copper is a the forefront of our growth ambitions,” he said.
The agreement sees the two companies produce an additional 120,000 tons each of copper annually from the commencement date without taking on additional capital expenditure. There would be a net present value uplift shared equally of at least $5bn pre-tax over the period of the agreement, Anglo said.
The MoU accounts for joint reserves and resources of about 60 million tons of copper. However, the partners retain the right to separately develop standalone projects, including development of underground resources, which do not fall under the terms of the agreement between the companies.
Anglo said it hoped to complete a due diligence and sign definitive agreements in the second half of this year with the prospect of other similar deals in the pipeline.
“I have forever spoken about the real intrinsic value of mining adjacencies and where there’s a real industrial logic for a combination,” said Wanblad in a media call. “There are a couple more in the portfolio. There are a number of interested parties to work through so maybe there are one or two more to come,” he said.
“This was a big prize to go after. We’ve been working on it for a time,” he added.
In December, Anglo announced it had completed a deal incorporating Vale’s Serpentina iron ore deposit into its Minas Rio iron ore mine in Brazil worth $157.5m. In terms of that agreement, Vale took a 15% stake in Minas Rio with an option over a further 15% shareholding.
Commenting on the agreement announced today between Anglo and Codelco, the Chlilean miner’s chairman Máximo Pacheco said it was “a unique opportunity to rethink the development of this mining district”. It represented “an unprecedented public-private collaboration,” he said.
