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.
Anglo-American in its increasingly acrimonious fight with Codelco on Thursday had to defend itself against what it termed “the criminal accusation” made by the president of the Federation of Copper Workers in Chile who sits on the Chile’s state-owned copper giant board.
At issue is a 49% stake in Anglo-American Sur, one of the world’s richest copper deposits, and Anglo CEO Cynthia Carrol is having to utilize all her diplomatic nous to steer the company through the crisis as Bloomberg reports:
It’s “completely inappropriate” for criminal proceedings to be considered against any individuals in what is a contractual dispute between two companies, particularly when initiated by a Codelco board member, Carroll said.
In an ongoing legal tit for tat Codelco earlier this month said it is seeking “the forced enforcement of the contract” through the immediate purchase of the shares in terms of an option first granted in 1978 and compensation for breach of contract.
Platts quoteds Codelco CEO Diego Hernandez at the time:
“This is the only possible path when the counterparty acts erratically and breaches the contracts. I had never expected something like this from a world-class company.”
The war of words has been escalating since November when The Telegraph reported Carroll took a last-minute flight to Santiago to calm tempers over the sale of a 24.5% stake to Mitsubishi Corporation but neither Chile’s president Sebastian Pinera, finance minister Felipe Larrain or mining minister Hernan de Solminihac would see her.
She is understood to have contacted all three before announcing the $5.39 billion deal that undermines state-owned copper giant Codelco’s plan to exercise the 33-year old option to buy half of Anglo’s Sur copper complex that includes the newly expanded $2.8 billion Los Bronces mine.
Anglo said the Mitsubishi transaction values its Chile properties at $22 billion. Codelco was offering $6 billion for 50%. Over and above the lowball offer from Codelco, what must really gall Anglo is that they would have had to pay around $1 billion in taxes on the transaction. Copper accounts for roughly a third of Anglo’s profits.
Image of Cynthia Carroll from WEF photostream on Flickr.
3 Comments
Cg
Seems there is a campaign to ousr Cynthia.
AR
The article fails to notice that Anglo has systematically avoided paying taxes in Chile, which makes the case even more outrageous. The mine “Disputada” is prodigious, but Anglo has managed to turn only red digits since it is operating it. The buying option has been carried since the transactions with Exxon, and is now being exercised, Anglo has profited intensely from this mine and has just used the Mitsubishi ploy to gain profit unfairly over Codelco. The behaviour of Carrol can only be seen as erratic, as she says she has confidence in the Chilean justice, and at the same time flies and asks for emergency meetings with the president, what a joke she is! The president has no direct control of Codelco and does not have an obligation to receive a CEO from a private company at her leisure.
HB
It is another example of the continued rape of then Third World or now Developing Countries. MNCs come with next to nothing investment. They make big statement about cost of investment, especially start-up costs. Inflated, transfer-pricing and falsified accounts to meet the local (for example Chilean) objectives pay no taxes. They enjoy tax holidays; pay poverty level wages and distribute huge profits to shareholders.
Now they want to cash out. Are they going to pay back taxes, or compensate workers, current and in the past.
It i s one of these dicey situation in exploitation of a people. It is Chile again and an American concern. Allende may be replayed. The President and Finance minister beware. It is 1973 being replayed again.
I am interested in seeing how it plays.
HB