Codelco to sell part stake in Anglo American Sur JV to Mitsui for $998 mn

02 Nov 2012

Chilean state mining company Codelco has agreed to sell a part of its Anglo American Sur joint venture to Japan's Mitsui & Co in a $998 million deal.

Anglo American Sur is a three-way joint venture of Codelco, London-based diversified miner Anglo American and Japanese trading house Mitsui & Co.

Codelco, the world's biggest copper producer, took Anglo American to court after it sold a 24.5-per cent stake in its Sur copper mining complex in southern Chile to Japanese trading house Mitsubishi, for $5.39 billion, valuing the copper miner at $22 billion.

Codelco has a long-standing option to buy 49 per cent of Anglo American Sur once every three years in January under an earlier agreed deal, and the sale undermined Codelco's plans of exercising its option to buy the stake from Anglo American.

Codelco wanted to buy the stake at low-ball price of $2.5 billion while Anglo American sold the stake for $5.39 billion.

Under an out-of-court deal, Anglo American agreed to reduce its stake in Anglo American Sur from 75.5 per cent to 50.1 per cent, but retained control of the JV, while Codelco roped in Mitsui as its financing partner, to buy 29.5 per cent of Anglo American Sur for $2.8 billion in cash.

Mitsui lent Codelco $1.87 billion for acquiring 29.5 per cent in Anglo American Sur. The loan was to be repaid over 7-1/2 years at a variable interest rate of Libor plus 2.5 per cent per year, and Codelco would pay the loan from the dividend money it received from Anglo American Sur.