Rio Tinto, Panguna stakeholders to address mine legacy impacts at roundtable
The Panguna Mine Legacy Impact Assessment is expected to be published later this month.
After over two months of futile negotiations behind closed doors between Chile’s state-owned copper giant Codelco and London-based miner Anglo American (LON:AAL), a resolution of the dispute that have seen both parties sunk in a legal battle seems far off. These were the words of Codelco’s CEO Diego Hernandez, to Chilean newspaper La Tercera.
The conflict between the companies goes back to November last year, when Codelco decided to exercise an option and Anglo American responded by selling a 24.5% stake in its southern Chilean division to Japan’s Mitsubishi Corp. for $5.39 billion. By doing this, Anglo undermined plans by Codelco to exercise its option, something that copper miner would only have been able to do in January.
A failed attempt by Codelco to force Mitsubishi to hand over the particulars of the deal in December drove the Chilean company back to the courts by formally informing Anglo American that it was “exercising its legal option” to buy the contested 49% in Anglo Sur.
“We were talking with Anglo until Jan. 31. I can’t reveal what we discussed, due to a confidentiality clause, which lasted for two months and has now expired,” CEO Diego Hernandez told La Tercera.
He added that the parties haven’t renewed the talks, which demonstrates that their respective positions are “sufficiently divergent and shows that the legal route is today the only one.”
Investors, as well as foreign mining companies that operate in Chile, are concerned about the potential repercussion of the ongoing battle, reports The Financial Times:
“Why pick a fight with a country where one of your key assets is?” asks one industry expert.
“It is unfortunate,” says one chief executive at a rival mining group. “This could paint international mining companies very badly in the eyes of the Chilean public,” he adds.
Hernandez added that Codelco was “in a strong position” and if the issue with Anglo American doesn’t get resolved by August, when Mitsui’s loan expires, they company will make use of “other sources” for financing the operation and to buy the disputed 49% in Anglo Sur.
The London-based miner argues it was entitled to sell shares in the assets to Japan’s Mitsubishi before January, while the copper giant insists that Anglo violated the Chilean legal principle of good faith by selling the stake.
A Chilean judge may request a process of conciliation in late March, urging the opponents to reach an out-of-court agreement, Hernandez said, adding that the process was a formality.
The legal dispute between Anglo American could last up to five years.
