Anglo American plc (“Anglo American”) announced in a statement on Thursday the signing of a memorandum of understanding (“MoU”) between its 50.1% owned subsidiary Anglo American Sur SA (“AAS”) and the Chilean state-owned mining company Codelco for a framework to implement a joint mine plan for the two companies’ respective, adjacent copper mines of Los Bronces and Andina in Chile.
Anglo American said that the joint mine plan will increase copper production with minimal additional capital required, helping to unlock the full value of this world-class mining district and generating an expected NPV uplift of at least $5 billion pre-tax over the period of the agreement, to be shared equally.
Anglo American added that a new operating company, jointly owned and controlled by AAS and Codelco, will coordinate the execution of the joint mine plan and optimise the use of the processing capacity of the two operations. “The resulting copper production and value generated, as well as any costs and liabilities from the joint mine plan, will be shared equally between AAS and Codelco. AAS and Codelco will retain full ownership rights of their respective assets, such as mining concessions, plants, and ancillary assets and will continue to exploit their respective concessions separately.”
Duncan Wanblad, Chief Executive of Anglo American, said that copper is at the forefront of our growth ambitions and we already have a clear pathway to more than 1 million tonnes of annual copper production by the early 2030s, a 30% increase. “Building on that growth pipeline, Los Bronces and Andina present obvious and significant adjacency benefits and together represent approximately 2% of global copper resources and reserves, with approximately 60 million tonnes of contained copper. By putting in place a joint mine plan and optimising the use of our respective processing plants, we believe we can unlock an additional 2.7 million tonnes of copper production over a 21-year period from 2030 alongside other operational synergies made possible by coordinating our activities across the site.”
Wanblad said that Anglo American and Codelco will both retain flexibility to develop separate standalone projects, including development of underground resources during the period of the joint mine plan in an appropriately coordinated manner. “Our technical teams have been working together for many years to identify the optimal configuration to unlock the full value of this extraordinary mining district. We are delighted that our work with Codelco has created the foundations for an agreement that can create very significant additional value for Anglo American and Codelco, for our JV partners in AA Sur and other stakeholders, and for Chile.”
Máximo Pacheco, Chairman of Codelco, commented: “Codelco and Anglo American have been good neighbours for decades. This relationship has developed through more than 10 cooperation agreements between the two companies over half a century. Today, we have a unique opportunity to rethink the development of this mining district and take a strategic and beneficial step: moving forward with an alliance that will allow us to increase copper production by an average of nearly 120 thousand tonnes of fine copper per year, without any material additional investments.”
Pacheco added that considering total production, this district would become one of the three most important in Chile and the fourth worldwide. “In this way, we will contribute a critical mineral for the transition to a decarbonised economy and generate additional value of at least $5 billion pre-tax, increasing our contribution in the short and medium term while strengthening Chile’s position as a leading global copper supplier. This project represents an unprecedented public-private collaboration model globally, with a corporate governance structure equally composed of Codelco and Anglo American. Each company will conduct its mining operations independently but in a coordinated manner, safeguarding the current socio-environmental commitments of both and placing the protection of high Andean ecosystems and their biodiversity at the centre.”
Anglo American said that the companies have also established sustainability principles to guide the implementation of the joint mine plan, which safeguard both social programmes and existing environmental commitments.
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