Anglo and Codelco like the boy who cried wolf: dispute deadline moved to July 17

London-based Anglo American (LSE:AAL) and Chile's state-owned Codelco did not come to an agreement on Friday, as they had previously announced, regarding disputed copper assets that has had the miners engaged in a bitter legal confrontation for months. Instead they have agreed to extend the talks until July 17.

Anglo said today that both parties requested the continued suspension of their legal proceedings at the 14th Civil Court of Santiago to extend the period for exploring an agreement in relation to Anglo American Sur.

Investors are closely watching this case to see if the parties can finally achieve a deal before the new self-imposed deadline expires. If not, then they will go back to court and extend the dispute for years, damaging their reputation and likely affecting their respective business.

As a State-owned company, Codelco’s potential defeat would be a bitter political blow with uncertain ramifications.

Anglo, on the other hand, faces pressure from its shareholders as it needs to prove the recent $2.8 billion invested in the Los Bronces copper mine, one its Sur division’s operations, won’t be in vain.  If Codelco wins Anglo would lose its 100% ownership as a consequence.

Since 2011, the world's largest copper producer and Anglo are fighting over contracts affecting the diversified miner’s division in the South of Chile, home for the world’s fifth largest copper mine.

In late May, the parties agreed to put their legal battle on hold until June 22 to explore the chance of reaching an agreement. A day after this announcement, Codelco CEO Diego Hernandez resigned claiming “personal reasons,” which gave room for speculations.

The clash between Anglo American and Codelco goes back to November last year, when the copper giant decided to exercise an option and Anglo American responded by selling a 24.5% stake in its southern Chilean division to Japan’s Mitsubishi Corp. for $5.39 billion. By doing this, Anglo undermined Codelco plans to exercise its option, something that the copper miner could only have done in January.

A failed attempt by Codelco to force Mitsubishi to hand over the particulars of the deal in December drove the Chilean company back to the courts by formally informing Anglo American that it was “exercising its legal option” to buy the contested 49% in Anglo Sur.

If an agreement is not possible, then Chilean courts will have to settle the conflict.

Anglo American is one of Chile’s largest foreign investors.