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\t\t<\/span><\/p>\n <\/span><\/p>\n \n \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":" By Alexandra Ulmer SANTIAGO, Aug 21 (Reuters) – Rival mining titans Anglo American and Codelco appear poised, after months of legal wrangling, to clinch a deal in a billion-dollar dispute over coveted Chilean copper assets. Investors are betting state-owned copper company Codelco and global miner Anglo will reach a settlement before their Friday deadline and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-13732","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/13732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=13732"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/13732\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=13732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=13732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=13732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}By Alexandra Ulmer\n SANTIAGO, Aug 21 (Reuters) - Rival mining titans Anglo\nAmerican and Codelco appear poised, after months of legal\nwrangling, to clinch a deal in a billion-dollar dispute over\ncoveted Chilean copper assets.\n Investors are betting state-owned copper company Codelco and\nglobal miner Anglo will reach a settlement before their Friday\ndeadline and avoid plunging back into a courtroom showdown that\ncould drag on for years.\n At stake are assets that include Anglo's Los Bronces mine,\nwhich could produce 490,000 tonnes of copper annually and become\nthe world's No. 5 copper operation - an enticing prospect given\na lack of big new copper finds in recent years.\n Following are some questions and answers on the dispute,\nwhich involves companies from three continents.\n \n HOW DID IT UNFOLD?\n The conflict between Codelco, the world's No. 1\ncopper producer, and Anglo centers on an option\nagreement dating back to 1978. \n Last October, Codelco said it would exercise the option to\nbuy a 49 percent stake in Anglo Sur mining complex in\ncentral-southern Chile when the option window opened in January,\n2012.\n Codelco secured a $6.75 billion bridging loan from Japan's\nMitsui Co to exercise its Anglo option, with the\nright, but not the obligation, to pay off part of the loan via\nthe sale of an indirect stake of half the shares acquired. \n Weeks later, Anglo dented Codelco's ambitions with a\nstunning pre-emptive sale of a 24.5-percent stake in Anglo Sur\nto Japanese trading house Mitsubishi Corp. Anglo said\nthe $5.4 billion deal secured better value for investors.\n Since then, the companies have been tussling for the\nproperties. Ironically, the Los Bronces mine used to be called\nLa Disputada, \"the disputed one,\" in Spanish.\n \n \n \n WHAT KIND OF DEAL IS MOST LIKELY?\n The firms have maintained silence over the content of the\nconfidential talks since late May, but sources familiar with the\nnegotiations have told Reuters Mitsubishi could cede part of its\nstake in Anglo Sur to allow for a deal.\n Sources said an agreement is set to see Anglo retaining a 51\npercent majority in Anglo Sur, and Mitsubishi yielding a small\npercentage of about 5 percent to Mitsui, which had agreed to\nfinance Codelco.\n Codelco would then get the remaining 24.5 percent at a\n\"compromise\" discount to the option value of around $2.8 billion\n- below an earlier $3 billion value due to weaker copper prices.\nIt is also set to get land, the sources said. \n Such a deal would avoid a protracted and costly legal battle\nthat could distract management and worry shareholders.\n \n WHO STANDS TO WIN?\n Both mining titans should benefit financially, and Chile,\nthe world's No. 1 copper producer, stands to gain by ridding\nitself of a potentially nasty legal battle and likely reaping a\nhefty capital gains tax from the various sales.\n Codelco could end up with a sizeable share in the assets at\nan attractive price, along with land. Anglo says it has\npreserved value for shareholders with its Mitsubishi move, while\na negotiated settlement would avoid a distracting legal tussle.\n \"This is a good solution to get out of the mess. It would be\na win-win,\" said Winston Alburquenque, professor of natural\nresource law at the Universidad Catolica in Santiago. \"Perhaps\nthis result would be better for Codelco than for Anglo, but\nAnglo had this contract... (which was) a rock in its shoe.\"\n Key to Anglo's decision to pre-empt the option was a big\ndiscrepancy between the price of the assets on the market, where\ncopper assets are rare, and under the option formula. Codelco\nhas valued its option for the 49 percent at around $6 billion.\nThat is not even half of what Anglo's 24.5 percent stake sale to\nMitsubishi implies that chunk is worth.\n Due to the significant difference between the two pricing\nformulas and even if it ends up having to pay compensation,\nAnglo will likely still gain far more than if it had let Codelco\nbuy up 49 percent of the prized properties.\n It would also rid itself of a lingering woe at a time when\nshareholders have complained about low returns, trouble with its\nBrazil iron ore project and South African platinum mines.\n \n Both Codelco and Chile appear set to portray a deal as a\nvictory. The deal would enable the state miner to gain\nparticipation in a coveted copper asset adjacent to its own\nAndina mine and show itself as a serious global player.\n Increasing its assets could also permit Codelco to take on\nmore debt as the miner ramps up ambitious plans to lift output\nat its massive but tired deposits to over 2 million tonnes. This\ndepends on whether the assets become part of Codelco or Acrux,\nthe investment vehicle it formed to buy part of AAS.\n State-owned Codelco's profit lands in Chile's coffers, so\nthe company is constantly seeking ways to finance its mining\nplans without compromising its enviable debt rating. \n \"In general, we think Codelco (benefits more), because\nAnglo's poor first half results will appear even more dramatic\nonce its reduced stake in its best operation becomes evident,\"\nsaid Jose Pedro Fuenzalida, a senior analyst with LarrainVial in\nSantiago. \"On its end, Codelco would show a healthier cost\noutlook just before releasing its second quarter results, when\ncosts rose due to energy prices.\"\n But the state miner also has politics, public opinion and\nits powerful unions to take into consideration. \n A perception that the firm ceded part of its \"right to the\n49 percent\" to a foreign private miner could spark outcry over\nthe company that annually contributes billions of dollars to\nstate coffers.\n Japan's Mitsui and Mitsubishi are paying steep prices to\nenter the properties as minority shareholders, but this usually\nconstitutes their business model. \n \n WHAT ARE THE UNKNOWNS? \n The sparring miners will likely be associates in exploiting\nLos Bronces, perched 3,500m (11,483 feet) high in the Andes and\njust kilometers from Codelco's Andina, set to be the company's\nmost productive mine as of 2021. \n Some in the industry have long speculated about breaking\ndown the thin wall between the deposits to create one mega mine.\nIt would at least make sense for Anglo and Codelco to share\ncommon infrastructure.\n The exact forms of payment, the attractiveness of the two\ndeposits Anglo may cede to Codelco and how future investments in\nthe mining area would be divvied up also remain unclear. \n Another question mark is the future of Acrux, the investment\nvehicle Codelco formed to allow its potential purchase of a\nstake in the Sur properties. \n \"It's said this could be a bridge towards\ninternationalization for Codelco,\" said Raul Castro, an\nassistant professor at the Universidad de Chile's mining\nengineering department. \n Copper heavyweight Codelco lacks a significant presence\noutside of Chile, save for a few exploration projects in Latin\nAmerica.\n After an acrimonious 10-month battle, it remains to be seen\nhow Anglo's shareholders, Chile's public and Codelco's unions\nassess the deal.<\/pre>\n