Bloomberg News

Anglo American Rises in London, Brushing Off Codelco Threat

January 04, 2012

(Updates with closing prices in second, final paragraphs.)

Jan. 3 (Bloomberg) -- Anglo American Plc, battling against Chile’s Codelco for control of copper resources in the country, tracked mine operators higher in London trading as analysts said a lawsuit threatened by the Latin American company was expected.

Anglo rose 5 percent in the city, Rio Tinto Group climbed 6.4 percent and BHP Billiton Ltd. gained 6.2 percent. Codelco said yesterday it was ready to sue Anglo over the dispute.

Anglo, based in London, is in conflict over ownership of Anglo Sur, which holds the world’s fifth-largest copper mine. The U.K. company opposes a 1978 option allowing Codelco to buy as much as 49 percent of Sur below market value and in November sold 24.5 percent of the unit to Mitsubishi Corp. for $5.39 billion, reducing the stake available to the Chilean company.

“I’d say there’s a 50 or 60 percent chance that Anglo will end up owning 51 percent” of Anglo Sur, Peter Davey, metals and mining research chief at Standard Bank Group Ltd., said by phone from London. “The market has already factored this in.”

Under the terms of the 1978 accord, Codelco would pay about $6 billion, the Santiago-based company said in a statement. It will sue Anglo if necessary, Chairman Gerardo Jofre said.

The dispute began in October when Codelco announced funding with Mitsui & Co. to buy the stake using the option, which may be exercised every third January until 2027. Anglo’s subsequent sale of a stake valued the unit at $22 billion. Codelco secured an injunction on Nov. 15 preventing further sales, which is scheduled to be reviewed by a Santiago court this month.

Anglo said in a court writ last month that Codelco breached their contract by trying to take up the option before it became valid in January. While Anglo is under no obligation to sell any Sur shares, it’s willing to work with Codelco to find a solution in shareholders’ interest, it said today in a statement.

Anglo rose 118 pence to 2,497 pence at the close in London, valuing it at 33 billion pounds ($51.7 billion).

--Editors: Tony Barrett, Stephen Cunningham

To contact the reporter on this story: Jana Marais in Johannesburg at jmarais@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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