Vale taps Marcelo Bacci as new CFO
Bacci, who served as finance chief for pulp maker Suzano, will replace Murilo Muller, who is temporarily serving in the job.
The legal battle between Codelco and Anglo American is escalating. Yesterday, Chile’s state-owned copper company lodged a so-called pre-judicial preparatory measure in the 17th Civil Court of Santiago, seeking details of Mitsubishi’s purchase of a 24.5 percent stake announced on Nov. 9. The measure, reports Chilean newspaper La Tercera aims to annul the $5.39 billion deal between Anglo and Mitsubishi.
While this was happening, London-based miner filed a legal action to annul Codelco’s “protection petition” presented Nov.14, which prevents Anglo from keep selling part of its assets.
Codelco is exercising an option it has held since 1998 to buy 49% of Anglo American Sur (AAS) for US$6,75bn from Anglo American. AAS includes the Los Bronces and El Soldado copper mines in Chile and the Chagressmelter, explains analyst Charlotte Mathews:
Codelco has done this at an opportune time as Anglo sold 24.5% of AAS to Mitsubishi for $5,4bn. However, the two companies are disputing whose shareholding has been diluted by the sale. Anglo argues the deal reduces Codelco’s stake to 24.5%, while Codelco argues it reduces Anglo’s remaining 51% stake proportionately. The matter will go to court.
The legal battle is a different situation from the global trend of governments trying to extract a greater share of profits from their mineral resources through taxes or nationalization.
According to Anglo’s lawyer Cristobal Eyzaguirre, however, Codelco’s actions are “nothing more than a desperate attempt to obtain a huge profit to which it never had a right,” he wrote in documents filed yesterday and distributed to the press by the company in an e-mail.
He added that Codelco and some Chilean authorities had attempted “to deprive a foreign company of a legitimate right in accordance with the law and valid and existing contracts”.
Anglo American claims that, with the application for protection, Codelco has launched an “artificial dispute over the interpretation of certain contractual clauses” and insists on that Codelco’s injunction that prevents further sales of stakes in Sur “isn’t coherent.”
“Anglo has an unequivocal right to sell stakes in its Sur assets outside of Codelco’s option, which can be exercised for a month long period every three years until 2007,” Eyzaguire wrote.
Codelco said it was studying Anglo’s response and would “in the coming days define what steps to take”.
Comments
Oren Wilson
Independently from the outcome of this legal dispute is that Anglo American and the other mining companies operating in Chile will have to consider a future increase in taxes. This dispute has generated a national feeling of unity in Chile not seen in a long time. The recent increase of royalty increase was also boosted by Exxon and Anglo Americans intent not the pay the tax in their deal. One can conclude that AALs agressive comercial behavior has stimulated a more nationalistisc approach to chilean natural resources.