June 22, 2012 / 5:29 PM / 6 years ago

Anglo, Codelco seek to extend talks till July 17

SANTIAGO (Reuters) - Global miner Anglo American Plc and world No. 1 copper producer Codelco have asked a local court to extend their negotiation window to July 17 from June 22, the companies said in separate statements on Friday.

A worker checks a shipment of copper inside the plant at the copper refinery of Codelco Ventanas in Ventanas city, about 164 km (101 miles) northwest of Santiago, April 16, 2012. REUTERS/Eliseo Fernandez

The mining titans requested the extension “to allow talks to continue,” suggesting they may be close to a deal to end a bitter dispute over coveted copper assets.

“Anglo American and Codelco have agreed to extend the period for exploring the possibility of negotiating an agreement in relation to Anglo American Sur,” the companies said.

A source who is close to Codelco’s legal team told Reuters earlier on Friday the companies requested a July 17 conciliation session. Reuters had exclusively reported on Thursday that the companies would seek more time to talk.

Investors have been watching to see if Chile’s state-owned copper giant Codelco CODEL.UL and Anglo (AAL.L) will hash out a deal or whether they return to a courtroom for a showdown that could drag on for years.

“This means they’re well on their way to a deal,” said Juan Ignacio Guzman, mining professor at the Universidad Catolica.

The contract conflict between Codelco and Anglo centers on an option agreement dating to 1978.

Codelco said in October it would exercise the option to buy a 49 percent stake in Anglo American Sur (AAS) when the option window opened in January.

But weeks later, Anglo surprised everyone with the pre-emptive sale of a 24.5 percent stake in AAS to Mitsubishi Corp (8058.T), in a $5.4 billion deal that dented Codelco’s ambitions but which it says secured better value for investors.

Since then, the firms have been tussling for the properties, which include the promising Los Bronces mine that used to be called La Disputada, “the disputed one,” in Spanish.

“Mitsubishi and Mitsui are also at the table negotiating,” Guzman said. “(They) also have to give their opinion. Any deal affects them.”

Codelco said in October it had secured a $6.75 billion bridging loan from Japan’s Mitsui & Co (8031.T) to allow it to exercise its option.

Los Bronces, which could at its peak be the world’s fifth-biggest copper mine, stands out in a red metal market defined by its lack of new deposits.

Anglo expects its ramped-up mine to more than double annual copper output from 2010 levels in its first three years of full production, before ebbing on dwindling ore grades. It could produce a peak of 490,000 tons of copper annually.

A slice of the prized properties would be a major boost for Codelco, which is battling stubbornly dwindling ore grades in its tired deposits as it seeks to boost its annual output to 2.1 million tons by 2020.

Reporting by Erik Lopez Additional reporting by Alexandra Ulmer and Anthony Esposito; Writing by Alexandra Ulmer Editing by Bob Burgdorfer, Gary Hill

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