Codelco, Anglo American settle Chile mine dispute

Mining giants Codelco and Anglo American said Thursday they had ended their legal battle over the British firm's sale of a $5.4 billion stake in its Chilean copper operations.

The two companies said they would form a new partnership also involving Japan's Mitsubishi and Mitsui groups for Anglo American Sur, which produces 260,000 tonnes of copper annually.

Anglo American will retain a 50.1 percent shareholding in the company, known as AA Sur, while a joint venture of Codelco and Mitsui, controlled by Chile's state-owned Codelco, will acquire a 29.5 percent interest.

Mitsubishi will hold the rest of the shares, less than what it had planned on getting in its original investment in the company last year, which sparked the dispute.

The move put an end to a festering battle over rights to the company's shares, after Codelco sought to block Anglo American's November 2011 deal to sell 24.5 percent of AA Sur to Mitsubishi.

Codelco had insisted that it had a preemptive option to purchase a 49 percent interest of its own in the company, which before Mitsubishi's stake purchase was wholly owned by Anglo American.

At stake was a share in the valuable central Chile mining operation, which is moving to expand production to 490,000 tonnes annually.

"Today's commercial agreement demonstrates Anglo American's and Codelco's focus on our future and potential as partners in the best interests of both companies," Anglo American chief executive Cynthia Carroll said in a statement.

"The combination of Anglo American, Codelco, Mitsubishi and Mitsui forms a compelling proposition for future investment in the Los Bronces district -- one of the world's most exciting producing and prospective copper ore bodies -- for the benefit of all our respective shareholders."

Codelco chairman Gerardo Jofre said the new partnership "brings together the world's largest copper producer with one of the world's premier diversified mining companies."

"We are all committed to working collaboratively, in a spirit of goodwill, to realise the considerable potential of AA Sur for the benefit of Chilean jobs and the Chilean economy as a whole," he added.

Chile's Mines Minister Hernan de Solminihac backed the deal.

"This agreement strengthens Codelco, because it means exercising a purchase option on very favorable terms on an asset of great value, strengthening the leadership of Codelco's copper industry worldwide," Solminihac said.

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