Codelco, Anglo Settle Mine Fight

Codelco and Anglo American have ended their dispute over a Chilean mining complex, Codelco says, with Chilean miner ending up with a lower stake than it wanted, but at a discounted price. The $2.9bn deal for a piece of Anglo’s Anglo American Sur (AA Sur) unit comes the day before a court-imposed deadline. Anglo reduces its ownership to 50.1% from 75.5%, while Codelco and its financing partner Mitsui come away with a 29.5% stake, below the 49% it originally sought. In the first piece of the transaction, Codelco-Mitsui JV controlled by Codelco acquires a 24.5% stake in AA Sur for $1.7bn, representing a consideration of $1.8bn, adjusted for dividends paid in 2012. Codelco also receives some undeveloped properties from AA Sur. Separately, the JV gets another 5% of AA Sur for $1.1bn, with 4.1% of that coming from Anglo partner Mitsubishi, who retains 20.4%. Anglo American also pays Mitsubishi a $40m fee for its participation in the agreement. The transactions will be settled in cash and Anglo American intends to use the proceeds for general corporate purposes. Cleary Gottlieb advised Codelco and Shearman & Sterling advised Anglo American. Codelco had initially wanted to exercise a decades-old option to purchase 49%, and last year signed financing agreement of up to $6.75bn with Mitsui to fund the buy. Anglo agreed in November to sell 24.5% of the mine to Mitsubishi for $5.4bn, in an attempt to thwart Codelco’s exercising of the option. The two sides paused court proceedings in May to allow for talks. Mitsui is now lending Codelco $1.86bn for one year, and will have a 17% stake in the JV that can increase by 15.25% if it offers long-term financing.