Anglo American and Codelco, the Chilean copper miner, have agreed to restart settlement talks to try to avoid a multi-year legal battle over the ownership of copper mines in Chile worth as much as $22bn.
The companies, who were due to meet in court in Santiago on Tuesday, have both requested that legal action be suspended to allow time for the pair to discuss a possible agreement.
The two have been at loggerheads since last autumn, when Codelco announced it had raised $6.8bn from Japan’s Mitsui to exercise a long-standing option to buy 49 per cent stake in Anglo American Sur, a division of the London-listed miner that includes one of its most profitable mines, Los Bronces.
Anglo in November sought to head off Codelco’s purchase, selling 24.5 per cent of Sur to Mitsubishi for $5.4bn. Codelco has claimed it is entitled to 49 per cent of the copper business, under a contract which dates back to 1978, while Anglo insists it had the right to sell to a third party.
Anglo and Codelco have had no talks since January regarding a potential settlement. But Tuesday’s court date – a procedural hearing at which a judge is told whether the two sides have reached agreement – presented an opportunity for a thawing of relations.
Codelco has made clear in the past that it is open to a financial settlement of the contract, whereby it could end up with less than the 49 per cent it maintains it has rights to.
However, an out of court settlement could be in both companies’ interests.
Cynthia Carroll, Anglo’s chief executive, is under pressure from shareholders, who are frustrated that the company approved a $2.8bn expansion of the star Los Bronces mine without securing its ownership.
On the other hand, Codelco’s management risks embarrassment if Chilean courts rule in favour of the London-listed miner.
Diego Hernández, Codelco chief executive, told the Financial Times last month that the two companies had “stopped conversations on January 31”.
“We have been talking for almost two months to try to find common ground for an out of court agreement, but really positions are too far away and there was no expectation that if we went through negotiations we could reach an agreement that was according to our expectations,” he said.