Anglo Says Codelco Tried Power Abuse in Contract Dispute
Codelco, Chile’s state-owned copper company, and some authorities attempted to undertake a “brutal act of power abuse” in a contractual dispute with Anglo American Plc (AAL), the London-based company said in court documents.
Codelco violated laws as it sought to acquire 49 percent in Anglo’s Sur copper assets in Chile under the terms of an option agreement that can be exercised in a 30-day period starting Jan. 2, Anglo’s lawyer Cristobal Eyzaguirre wrote in documents filed today and distributed by the company in an e-mail.
“Codelco’s actions are nothing more than a desperate attempt to obtain a huge profit to which it never had a right,” Eyzaguirre wrote.
Anglo’s response to the Chilean court comes after Codelco secured an injunction on Nov. 15 preventing Anglo from selling further stakes in Sur. Anglo sold 24.5 percent of the unit on Nov. 9 to Japan’s Mitsubishi Corp. for $5.39 billion, a move Codelco said was an attempt to block it from exercising an option that dates back to 1978 when Exxon Mobil Corp. bought the Disputada copper mine from Chile’s government.
The unit includes Los Bronces, set to become the world’s fifth-biggest copper mine after an expansion, and adjoining undeveloped deposits that Anglo’s head of copper John MacKenzie described on Nov. 22 as the best in the world. Under the option contract, Codelco can acquire a 24.5 percent stake in the asset in January at almost half the value paid by Mitsubishi, according to Anglo’s Chile unit head Miguel Duran.
Right to Sell
Some government officials and Codelco have created an “artificial dispute” by threatening Anglo before the January option period, Eyzaguire wrote. The injunction that prevents further sales of stakes in Sur “isn’t coherent,” he said.
Anglo has an “unequivocal” right to sell stakes in its Sur assets outside of Codelco’s option, which can be exercised for a monthlong period every three years until 2007.
Anglo acted in “bad faith” by selling the stake to Mitsubishi a month after Codelco announced it would exercise the option for 49 percent, Codelco lawyer Pedro Pablo Gutierrez told reporters Nov. 15.
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