Mitsui loans Codelco US$6.75bn to take up Anglo option

Finance

Publishing Date: 12 Oct 2011 5:50pm GMT
Author: Mining Journal

Japan’s Mitsui & Co has agreed to provide US$6.75 billion in bridging finance to Codelco, allowing the Chilean state run entity to exercise an option to purchase 49% of Anglo American plc’s subsidiary in the country, Anglo Sur.

Anglo acquired the Sur complex, formerly known as La Disputada de Las Condes, in 2002 from Exxon Mobil Corp. Exxon bought La Disputada from state-owned Enami in 1978 which included a option for Enami to buy the holding every three years. The next opportunity is January 2012.

Codelco has a pre-determined value for the Anglo Sur interest of US$9.76 billion, valuing the entire business at US$20 billion. The entity owns the Los Bronces and Soldado mines, the Chagres smelter and the Los Sulfatos and San Enrique Monolito prospects.

Under the agreement, Mitsui will enter a 30,000t/y copper off-take agreement based on market price terms. While Codelco may also settle a portion of the loan by providing Mitsui with half of the interest in Anglo Sur that it ends up acquiring.

Codelco chief financial officer, Thomas Keller said the debt financing will help “avoid burdening” the company’s balance sheet.

Anglo confirmed the option agreement in a statement, adding that it would “consider the implications of Codelco's announcement”.