Vedanta to exclude base metals business from sweeping demerger
The group said it will consider the base metals business demerger at a later stage.
Chilean state giant Codelco, the world’s biggest copper producer, will have to strive this year to match record 2011 copper production of 1.735 million tonnes, said CEO Diego Hernandez to the El Mercurio newspaper’s Sunday edition.
The company, which produced a record 1.735 million tons of copper in 2011, is facing a complex year production-wise, said Hernandez, adding that “it will be hard to match 2011.”
Codelco will invest $4.5 billion this year in its Ministro Hales (photo) and Nuevo Nivel Mina El Teniente projects as well as works at its massive Chuquicamata deposit, as it seeks to counter lower ore grades and boost output to 2.1 million tonnes by 2020.
Hernandez referred to the ongoing legal battle with Anglo American over assets in the south of the country saying that the dispute could last years and there were no serious negotiations at the moment.
In November Anglo American sold a 24.5% stake in its southern Chilean properties to Japan’s Mitsubishi Corp. for $5.39 billion, undermining plans by Codelco to exercise the option that can be exercised every three years in January.
Chile decided at the end of October, barely a week after Anglo American announced that the $2.8 billion they splashed on expanding their flagship Los Bronces mine will start to bear fruit before year end, to exercise the 34-year old option that has lapsed before, blindsiding Anglo.
After a failed attempt by Codelco to force Mitsubishi to hand over particulars of the deal in December, the Chilean copper producer formally informed Anglo American that it was exercising the option.
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.
