Anglo American to Benefit from Copper Mine Deal

Anglo American (LON:AAL) is poised for a potential boost following the finalization of an agreement between Anglo American Sur S.A. (AAS), its 50.1%-owned subsidiary, and Codelco.

The definitive agreement outlines a joint mine plan for the Los Bronces and Andina copper operations in Chile. This collaborative effort aims to unlock “at least $5 billion of value” and enhance copper production, setting the stage for long-term growth.

The joint mine plan is projected to yield an additional 2.7 million tonnes of copper over a 21-year period, with production slated to commence upon receipt of necessary permits, anticipated around 2030.

This translates to roughly 120,000 tonnes of additional copper production annually, shared equally between AAS and Codelco. The agreement also anticipates approximately 15% lower unit costs relative to standalone operations, alongside minimal incremental capital expenditure.

The financial implications are substantial, with an expected pre-tax net present value uplift of at least $5 billion, to be split equally between AAS and Codelco.

The combined output from Los Bronces and Andina would have ranked among the top 10 copper mines globally in 2024.

Adjusted for the anticipated incremental 120,000 tonnes per year under the joint mine plan, it would rise into the top 5.

Duncan Wanblad, CEO of Anglo American, said: “Copper is a vital resource for the global energy transition and is at the forefront of our growth ambitions. We are delighted to finalise this landmark agreement with Codelco, ushering in a new chapter for Los Bronces and Andina, which are two exceptional copper assets.”

A new operating company, jointly owned and controlled by AAS and Codelco, will coordinate the implementation of the joint mine plan, optimizing processing capacity across both Los Bronces and Andina. Production and economic benefits, along with associated costs and liabilities, will be shared equally. Both parties will retain full ownership of their respective assets.

The agreement is subject to customary regulatory approvals and the securing of relevant environmental permits. The shareholders of AAS include Anglo American group (50.1%), the Mitsubishi Group (20.4%) and Becrux, a Codelco/Mitsui joint venture company (29.5%).