The Star Late Edition
Anglo brushes off Codelco’s court threat
ANGLO American, battling against Chile’s Codelco for control of copper resources in the country, tracked mine operators higher in London trading yesterday as analysts said a lawsuit threatened by the Latin American firm was expected.
Anglo rose 4.3 percent in the city, Rio Tinto climbed 5.3 percent and BHP Billiton gained 4.3 percent.
Codelco said yesterday that it was ready to sue Anglo over the dispute.
London-based Anglo is in conflict over ownership of Anglo Sur, which holds the world’s fifth-largest copper mine.
The UK company opposes a 1978 option allowing Codelco to buy as much as 49 percent of Sur below market value and in November sold 24.5 percent of the unit to Mitsubishi for $5.39 billion (R43.4bn), reducing the stake available to the Chilean company.
“I would say there’s a 50 percent or 60 percent chance that Anglo will end up owning 51 percent of Anglo Sur,” said Peter Davey, the metals and mining research chief at Standard Bank Group in London. “The market has already factored this in.”
Under the terms of the 1978 agreement, Codelco would pay about $6bn, the company said in a statement. It would sue Anglo if necessary, chairman Gerardo Jofre said.
The dispute began in October when Codelco announced funding with Mitsui to buy the stake using the option, which may be exercised every third January until 2027.
Anglo’s subsequent sale of a stake valued the unit at $22bn. Codelco secured an injunction in November preventing further sales, which is scheduled to be reviewed by a court in Santiago this month.
Anglo said in a court writ last month that Codelco breached the contract by trying to take up the option before it became valid in January.
While Anglo was under no obligation to sell any Sur shares, it was willing to work with Codelco to find a solution in shareholders’ interest, it said yesterday.
Anglo stock increased 5.1 percent in Johannesburg yesterday to close at R311.20.