(Updates with comments from Codelco CEO in fourth paragraph.)
Nov. 17 (Bloomberg) -- Anglo American Plc is risking its future in the world’s largest copper producing nation by denying Chile’s state-owned Codelco a 49 percent stake in its Sur unit, said Diego Hernandez, Codelco’s chief executive officer.
Anglo, part owner of the world’s biggest platinum and diamond producers, last week moved to block Codelco from exercising an option to buy 49 percent of its Chilean copper unit by selling a stake to Mitsubishi Corp. for $5.39 billion. Codelco is taking legal action against Anglo to protect the option.
Anglo wasn’t allowed to sell the 24.5 percent stake to Mitsubishi because Codelco had already started a process to buy 49 percent of Sur, Hernandez told reporters in Santiago today. Rather than defending the rights of its shareholders, Anglo American is putting its future in Chile at risk, he said.
The London-based company “made a mistake” in selling the share, he said.
The Santiago-based company was granted an injunction on Nov. 15 to prevent Anglo from selling additional stakes in the Sur unit.
Anglo will continue to invest in Chile, where it has spent $6.5 billion since 1980, the company said in a Nov. 9 statement announcing its sale to Mitsubishi. Anglo jointly operates Collahuasi, the world’s third-largest copper mine, in northern Chile with Xstrata Plc.
Codelco isn’t willing to start international arbitration with Anglo, which hasn’t approached the Chilean company for talks, Hernandez said. Codelco was surprised that Mitsubishi agreed to the deal with Anglo but won’t take legal action against the Japanese company, he said.
Codelco, the world’s largest copper producer, said last month it had signed a $6.75 billion bridge loan with Mitsui & Co. Ltd. to buy the stake in Sur. The Codelco option dates back to a government contract signed in 1978.
Anglo Sur includes Los Bronces in central Chile, which may become the fifth-largest copper mine in the world. The unit, which also includes the El Soldado mine and the Chagres smelter, produces about 450,000 metric tons a year, Codelco said in October.
--With assistance from Randall Woods in Santiago. Editors: Philip Sanders, Robert Jameson
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