GLOBAL miner Anglo American yesterday triggered a feud after announcing that it had sold a 24.5 per cent stake in its southern Chilean properties to Japan’s Mitsubishi Corp for $5.39bn (£3.38bn), defying plans by Chile’s state copper giant Codelco to exercise an option to buy a major stake.
Codelco, the world’s largest copper producer, last month announced it planned to use its option to buy a 49 per cent stake in Anglo American Sur (AAS). The company’s chief executive Diego Hernandez came out fighting yesterday, saying the sale to Mitsubishi could be reversed and that suing Anglo for damages was another option. He said: “This contract is made in Chile under Chilean law, not in New York or London,” he claimed.
“And in Chile, a...contract like this kind of option supposes good faith by both parties, and I think that is what Anglo American has violated.
“Naturally the operation can be reversed, or you can sue for damages, and in this case we are talking about significant numbers,” he added.
Anglo’s properties in southern Chile include the flagship expansion project Los Bronces, El Soldado mine, the Chagres smelter and Los Sulfatos and San Enrique Monolito exploration projects. It has invested around $2.8bn to develop Los Bronces. Anglo said in a statement: “Following a thorough assessment, and in the interests of its shareholders, it entered into a process to explore the potential value of the AAS assets through the evaluation of a sale of a minority stake in AAS.”
“Of course there is a risk (of a courtroom battle). But I doubt (Anglo) would have taken the steps that they have if they did not feel pretty confident that it was legal,” said Collins Stewart analyst John McGloin.