* Codelco, Anglo embroiled in bitter option contract spat
* Codelco wants Anglo to recognize “right to 49 pct” of AAS
* Codelco CEO abruptly announced resignation last week
SANTIAGO, May 27 (Reuters) – The incoming CEO of Codelco
has signaled there will be no change in the Chilean
state copper giant’s attitude toward its right to acquire 49
percent of Anglo American Plc’s assets in south-central
Chile, a local newspaper reported on Sunday.
Thomas Keller, who is set to take the helm of the world’s
top copper producer on June 1, also told the paper that if a
deal is not reached within a month, Codelco will revive its
litigation against global miner Anglo American.
The two sides have been waging an acrimonious battle since
last October over Codelco’s long-standing option to buy a
minority stake in the coveted Anglo American Sur (AAS)
properties, including the flagship Los Bronces mine.
Keller, who is currently Codelco’s chief financial officer,
is set to become CEO after Diego Hernandez abruptly resigned on
Thursday due to friction with the board.
The departure of Hernandez, announced two days after the
feuding miners agreed to pause their court battle to sit down
and talk, sparked questions about whether Codelco’s strategy in
the conflict might evolve under new leadership.
“Our objective continues to be to reach an agreement which
is acceptable for Codelco and has to do with (Anglo) recognizing
that we have the right to 49 percent” of the Anglo American Sur
(AAS) properties, Keller told local newspaper El Mercurio.
He said that if the company could not reach a deal with
Codelco, “we’re simply going to go forward in the courts.”
Keller did not elaborate on what kind of deal would be
acceptable. A multibillion-dollar, transnational legal fight
between the mining titans could take up to five years.
The spat between Codelco and Anglo centers on an option
agreement dating back to 1978. Codelco said in October it
planned to exercise the option to buy a 49 percent stake in AAS,
when the option window opened this January.
Just weeks later, however, Anglo surprised markets with the
pre-emptive sale of a 24.5 percent stake in AAS to Mitsubishi
Corp, with a $5.4 billion deal that dented Codelco’s
ambitions but which it says secured better value for investors.
“The strategy that Diego Hernandez devised for Codelco
remains completely valid for me,” Keller said. “The board has
been very clear in that his strategy will remain valid and that
my mandate is to continue with the same line of work he was
doing.”
Keller, 55, has a reputation as a sharp, accomplished
negotiator. He was the architect of financing for the plan to
buy Anglo’s south-central Chilean assets and was formerly CEO of
the world’s No. 3 copper miner, Collahuasi, which is part-owned
by Anglo.
Codelco produced a record 1.735 million tonnes of copper
last year, but the company forecasts that 2012 output will dip
before rising to 2.1 million tonnes by 2020 as its ambitious
expansion plans come on line.
“My mark will hopefully be to not only consolidate Codelco
as the world’s top copper producer but also to distinguish it in
the world for its high levels of efficiency, competitiveness and
productivity,” Keller said.
Anglo’s properties in southern Chile include the expansion
project Los Bronces – where Anglo has invested around $2.8
billion – and the El Soldado mine, the Chagres smelter and the
Los Sulfatos and San Enrique Monolito exploration projects.
Codelco is battling dwindling ore grades, extreme weather
and labor unrest as it seeks to boost output at its aging mines.
The Los Bronces deposit is adjacent to Codelco’s Andina
mine, and would be a major boost to the state miner’s
production.
