Chile Forum

rjulio wrote:international companies love to play that game as they end up being from nowhere. Is not the center of the conversation, but is part of it ..in the same sense that with the US oil spill was part of the public conversation that BP is a UK based company.
In the codelco case what aglomarican did was unethical then is no good PR for britsh doing biz in chile. .. As mac is good PR for americans. as a chinise woud say it give you face.

The money that controll the moster is UK and american (hence who profit from it), the people that do the thinking too. They might have spent many year is south africa , but the DNA is british and i dont think is right to say is a S.A. company.

...top shareholders are increasingly 'unhappy'
...shareholders will demand changes at the top

LONDON (Reuters) - Global miner Anglo American's CEO Cynthia Carroll is under pressure to resolve a row with Chile's state copper giant Codelco swiftly or shareholders will demand changes at the top, the Financial Times reported on Monday.

Anglo shocked Codelco and investors in November when it sold a 24.5 percent stake in its southern Chilean copper properties to Mitsubishi, undermining an option Codelco had to buy a 49 percent stake.

The dispute over the coveted assets threatens to plunge the sides into a protracted legal battle.

The FT cited people familiar with the situation as saying that top shareholders are increasingly 'unhappy' over the uncertainty of the situation in Chile and have been pushing for a quick resolution in recent weeks.

Anglo American officials acknowledge the concern of some investors, but say the company is defending shareholder value by fighting Codelco's attempt to take over a large stake in a prized asset, the newspaper said.

Reuters could not immediately reach Anglo American for comment.

Chile's Codelco exercises Anglo American option

SANTIAGO — Chilean state mining firm Codelco said Monday it was exercising its option to buy a 49 percent stake in a copper mining venture held by Anglo American in the latest twist of a long legal battle.

Less than two weeks after the London-based firm filed a breach of contract suit against Codelco, the Chilean group -- the world's top copper producer -- said it had filed documents with market regulators to exercise the purchase option based on a 1978 contract between the two firms.

It said the British-South African Anglo American group refused to provide enough information for a final price, and that consequently it set the price at about $6 billion for the unit known as Anglo American Sur.

Codelco, which announced plans for the purchase in October, has said it would finance it under a deal with Japanese trading house Mitsui.

The legal dispute heated up when Anglo American announced it had sold a 24.5 percent stake in its Chilean copper activities to Japan's Mitsubishi Corporation for $5.39 billion.

Codelco swiftly filed suit in a bid to guarantee its right to purchase a full 49 percent share of Anglo American Sur (AAS), after the sale to Mitsubishi presumably reduced the stake available.

Anglo American countered on December 22 with a breach of contract suit, saying Codelco had prematurely sought to use its option and prevented the British-based firm from exercising its contractual right to sell to Mitsubishi.

On Monday, Anglo American reiterated in a statement that "it was under no obligation to sell any of AAS shares to Codelco."

"In line with Chilean legislation and since Codelco did not honor the contract, Codelco does not have the right to exercise its purchase option with respect to Anglo American Sur and therefore any claim to exercise this option is null and void," the statement said.

Anglo American again stressed that it was "open to working with Codelco to find a trade deal in the interest of shareholders of the two companies."

But analysts cited by Chilean media said that given the lack of agreement, a protracted legal battle could be expected.

"On average, five years for this type of cases," said Antonio Gaspar, a professor of commercial law at Diego Portales University in Santiago.

According to the 1978 contract, Codelco has the option every three years to buy up to 49 percent of AAS -- and the Chilean mining giant in October announced plans to do that in January 2012.

The deal would give Codelco control of the operations which include the copper deposits known as Los Broncos and El Soldado, as well as the Chagres smelting facility and exploration projects in Chile.

The unit, which last year produced about 260,000 tons of copper, would be integrated in Codelco's Andina division, and boost the output for the company which produces about 11 percent of the world's copper.

Anglo American is among the world's largest mining companies, listed on the London and Johannesburg stock exchanges.

Chile’s Codelco formally exercises option to buy 49% of Anglo Sur

But Anglo American alleges breach of contract and refuses to sell any AAS shares.

Codelco, Chile’s state-owned mining company, formally announced Monday its intention to exercise its option to purchase 49 percent of Anglo American Sur (AAS).

Codelco is seeking immediate ownership of what the company calls the “undisputed 24.5 percent”of AAS and expects to purchase the other 24.5 percent if it prevails in the courts to void the sale made to Mitsuibishi last last year. “Codelco is expressing its willingness to acquire the number of shares for which there is no controversy,” read documents Codelco delivered to AAS on Monday.

For its part, Anglo American, the U.K.-based owner of AAS, alleged that Codelco violated the contract between the two companies and thus is not entitled to any shares of Anglo’s Chilean holdings.

Codelco owns an option to buy a 49 percent stake in AAS every three years in January. They first announced their intention to exercise the option in October with funding from Mitsui & Co., who was set to receive 24.5 percent of AAS after the January purchase was completed.

Shortly after the announcement, however, Anglo American attempted to block Codelco’s purchase through a 24.5 percent sale to the Japanese company Mitsubishi Corp. The deal would supposedly have allowed Codelco to purchase a smaller portion of AAS, but denied the Chilean company the right to buy 49 percent.

A Chilean court granted an injunction against Anglo American preventing the company from selling further shares of AAS while the court reviewed challenges. Anglo American appealed this injunction, but it was upheld at the end of December.

Codelco offered just under US$3 billion -- half of what the original contract’s price for the full 49 percent -- for the 24.5 percent share Codelco wants to purchase immediately.

Codelco sought to use figures from Anglo American’s contract with Mitsubishi to establish the value of the 24.5 percent purchase, but Codelco alleges that Anglo American is keeping these figures under wraps to prevent Codelco from calculating the exact value of the shares.

Codelco president Gerardo Jofré told La Tercera, “We have all our legal case developed to protect our option, which is in the interest of all Chileans.”

Anglo American maintains that they do not have to sell the full 49 percent or the so-called “undisputed 24.5 percent” to Codelco, contending that Codelco violated the original contract by attempting to exercise the option before the stipulated period.

The British company is citing a writ they filed in late December that seeks not only void the contract with Codelco, but also petitions for damages for Codelco’s actions to prevent further sales of AAS to other companies.

“As Codelco breached the contract,” Anglo American said in a statement, “they have no right to exercise the option with respect to AAS, and any purported exercise of the option will have no effect whatsoever.”

Jofré estimated that the legal battle could last anywhere from three to five years.

Chile Codelco, Anglo secret talks failed-report

SANTIAGO, Feb 14 (Reuters) - Two months of secretive
talks between Chile's state copper giant Codelco and miner Anglo
American failed to resolve a stake option dispute, so a legal
battle is for now the only way forward, Codelco's CEO told a
local paper's Tuesday edition.
The mining titans have been embroiled in a bitter spat after
Anglo pre-emptively sold 24.5 percent of its
southern-central Chilean properties from under world top copper
producer Codelco.
That stymied Codelco's bid to exercise an option to buy up a
49 percent stake in the proprieties, setting the stage for an
acrimonious legal battle.
"We were talking with Anglo until Jan. 31. I can't reveal
what we discussed, due to a confidentiality contract (for
talks), which lasted for two months and expired," CEO Diego
Hernandez told daily La Tercera's Tuesday edition.
"(The talks) haven't been renewed and that demonstrates that
positions are sufficiently divergent to mean the legal route is
today the only one."

Anglo argues it was entitled to sell a share in the assets
to Japan's Mitsubishi before Codelco's window to
exercise the option in January, while the state miner says Anglo
violated the Chilean legal principle of good faith by selling
the stake.
Anglo has refused to hand over any part of its flagship Sur
properties to Codelco, which argues it has now exercised its
option.
A local judge could request a process of conciliation in
late March to push the sides towards an out-of-court agreement,
Hernandez said, adding the process was a formality.
Both Anglo and Codelco have sued each other for violating
the contract, in a legal battle that could drag on for up to
five years.