(Updates with comments from Anglo’s head of copper in ninth paragraph, Anglo share price in last paragraph.)
Nov. 22 (Bloomberg) -- Chile’s government urged state-owned copper producer Codelco and Anglo American Plc to seek an out-of court resolution to a contractual dispute over the sale of a stake in Anglo’s mine and smelting assets in the country.
“First sit down and find what the different official positions are and find the best solution for the interests of all Chileans,” Mining Minister Hernan de Solminihac told reporters in Santiago today. “If a deal can’t be reached, follow the legal route.”
Anglo, based in London, this month moved to block Codelco from exercising an option to buy 49 percent of its Sur unit by selling a 24.5 percent stake to Japan’s Mitsubishi Corp. Codelco Chief Executive Officer Diego Hernandez, who won an injunction Nov. 15 to stop Anglo from selling any further stakes, said last week the Mitsubishi deal shouldn’t have happened because Codelco had already started the purchase process.
While Codelco is prepared to negotiate with Anglo, the starting point of any discussions would be to recognize Codelco’s right to the full 49 percent stake, Hernandez said today at the same event.
He declined to comment when asked if talks to end the dispute had already started. Miguel Duran, head of Anglo’s Chilean operations, also declined to comment on the matter during a visit to one of the company’s mines today.
Anglo, seeking to oppose the injunction, has said its contract with Codelco allows the sale of Sur shares to others before Codelco can exercise the option. The state-owned company is permitted to exercise the option in the month of January every three years until 2027. The injunction doesn’t apply to the Nov. 9 transaction with Mitsubishi, according to Anglo.
The Mitsubishi deal followed an October announcement by Codelco that it had signed a $6.75 billion bridge loan with Mitsui & Co. Anglo’s Sur unit owns the Los Bronces and El Soldado mines and the Chagres smelter in Chile.
Anglo probably will complete the ramp-up of its expanded Los Bronces mine within a year, faster than previously thought, John MacKenzie, head of the company’s copper business, told reporters today during a visit to the mine. Los Bronces is set to become the fifth biggest copper mine after the expansion.
Anglo is considering an expansion at Chagres, MacKenzie said. Two undeveloped deposits held through the Sur unit each have potential to match Los Bronces output levels, he said.
Copper for March delivery advanced 1.1 percent to $3.356 a pound by 10:17 a.m. on the Comex in New York. Prices reached the lowest level since Oct. 24 yesterday. Copper for three-month delivery climbed 1.1 percent to $7,390 a metric ton on the LME.
Anglo rose as much as 2.7 percent to 2,301 pence in London trading and was at 2,262 pence at 3:24 p.m.
--With assistance from James Attwood in Santiago. Editors: Dale Crofts, Robin Saponar
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