Anglo American and Codelco Seal $5bn Copper Mining Agreement in Chile

Anglo American has signed a major memorandum of understanding (MoU) with Codelco, Chile’s state-owned mining company. The deal is expected to generate a pre-tax net present value (NPV) of at least $5 billion. The two companies will combine operations at their adjacent Los Bronces and Andina copper mines in Chile, aiming to maximize production and efficiency.

Strategic Partnership to Boost Copper Production

The MoU establishes a new joint venture to manage both mines. Anglo American’s 50.1%-owned subsidiary, Anglo American Sur (AAS), and Codelco will jointly control the new entity. This partnership will optimize mining operations, increase processing capacity, and ensure that both companies share production, costs, and liabilities equally. However, both companies will maintain full ownership of their respective assets, including mining concessions and plants.

Importantly, the deal also includes sustainability guidelines to ensure environmental protection and the continued success of local social programs. Codelco Chairman, Máximo Pacheco, called the deal a groundbreaking public-private collaboration. He emphasized that both companies would focus on safeguarding Andean ecosystems and biodiversity throughout the process.

Moving Toward Final Agreements and Regulatory Approvals

Both companies plan to complete due diligence and finalize agreements by mid-2025. However, the deal depends on environmental permits and regulatory approvals. Until then, both mines will continue to operate under a cooperation agreement signed in 2019. The MoU estimates that the joint venture will manage 60 million tonnes of copper resources from the Los Bronces and Andina mines. However, the agreement excludes reserves from the underground projects at both sites.

Anglo American CEO, Duncan Wanblad, expressed excitement about the potential of the deal. He believes the project will unlock significant value for the companies, their stakeholders, and the Chilean economy.

Additionally, Anglo American recently announced the sale of its nickel operations in Brazil to MMG Singapore Resources for up to $500 million. This move is part of a broader strategy to focus on copper and iron ore mining, which are expected to be the main growth drivers for the company.