Codelco to Pay Under $1.8 Billion for Anglo Stake: Sources
World No.1 copper producer Codelco will pay under $1.8 billion for a stake in global miner Anglo American's south-central Chilean assets and the mining titans are set to end their bitter brawl on Thursday, sources said.
Anglo and Codelco are poised to present a joint request to terminate their months-long legal squabble over coveted copper properties early Thursday in Santiago.
The agreement over assets that include Anglo's Los Bronces mine, which could produce 490,000 tons of copper annually and become the world's No.5 copper operation, is seen coming before the firms' negotiation window closes on Friday.
Codelco would be paying a heavily discounted price for a chunk of Anglo American Sur. The state miner's original valuation of its option suggests the cost of buying a 24.5 percent stake is around $3 billion and Japanese trading house Mitsubishi paid $5.39 billion for that same percentage of Sur.
State-owned Codelco is purchasing a stake at "less than a third of its commercial value," a source said. The final sum Codelco pays will be adjusted based on different variables.
Last October, Codelco said it would exercise its option to buy a 49 percent stake in the Anglo Sur mining complex when the option window opened in January 2012.
It secured a $6.75 billion bridge loan from Japan's Mitsui & Co to exercise its option, with the right, but not the obligation, to pay off part of the loan via the sale of an indirect stake of half the shares acquired.
Weeks later, Anglo dented Codelco's ambitions with a stunning pre-emptive sale of a 24.5-percent stake in Anglo Sur to Mitsubishi.
Sources say that under the deal, Mitsubishi will cede 5 percent of its 24.5 percent stake to Mitsui. Anglo will also give Codelco mining assets worth $400 million.
Anglo will end up with 51 percent of the mining complex.
"At this point, nothing has been decided on the matter regarding our company," said a Mitsui spokesman, declining to comment further. A Mitsubishi spokesman declined to comment.
