Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
The heated legal battle between diversified miner Anglo American (LON:ALL) and its Chilean adversary Codelco, the world’s largest copper producer, has finally come to an end, as the parties announced Thursday that they’ve reached an agreement.
The cash deal of over $2.8 billion, omitting land, reduces Anglo’s stake in its Anglo American Sur properties to 50.1%. The London-based miner and fellow shareholder Mitsubishi, will sell their joint 29.5% stake to Codelco and its financing partner Japan’s Mitsui & Co.
The Sur complex includes the Los Bronces and El Soldado copper mines, the Chagres smelter and two newly discovered copper-rich deposits.
Codelco CEO Thomas Keller said in a statement that he was more than pleased with the terms of the settlement and noted that after the transaction the copper miner will add 115,000 tons of the red metal to its annual production, a 7% increase.
He added that Los Bronces is on track to become one of the biggest copper mines in the world.
The agreement clearly favours Codelco and the Chilean State. The copper producer benefits heavily from the acquisitions of two of Anglo’s mining properties. The undeveloped assets, located close to the copper miner’s Andina division, are worth about $400 million.
Chile’s state gets revenue in the form of taxes from the London-based company – about a third of the $1 billion paid last year after Anglo sold its 24.5% stake to Mitsubishi, will have to be paid again. This time Anglo will shell out $318 million in tax on the overall deal announced today.
The deal will allow Codelco to develop one of the largest copper reserves in the world: the so-called district El Bronce-Río Blanco, where two key projects are located: San Enrique Monolito and Los Sulfatos, with combined copper reserves of 2,100 million tonnes.
The battle between the companies goes back to October last year when barely a week after Anglo American announced that the $2.8 billion Los Bronces investment will start to bear fruit, Codelco decided to exercise an option to acquire half of it.
The satisfactory end to the confrontation is relief for Anglo’s CEO Cynthia Carroll, who is dealing with growing difficulties in South African platinum operations and recurring interruptions at its iron ore project in Brazil.
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