Anglo defends itself against 'criminal accusation' as mud flies in fight with Codelco
Anglo-American in its increasingly acrimonious fight with Codelco on Thursday had to defend itself against what it termed "the criminal accusation" made by the president of the Federation of Copper Workers in Chile who sits on the Chile’s state-owned copper giant board.
At issue is a 49% stake in Anglo-American Sur, one of the world's richest copper deposits, and Anglo CEO Cynthia Carrol is having to utilize all her diplomatic nous to steer the company through the crisis as Bloomberg reports:
It’s “completely inappropriate” for criminal proceedings to be considered against any individuals in what is a contractual dispute between two companies, particularly when initiated by a Codelco board member, Carroll said.
In an ongoing legal tit for tat Codelco earlier this month said it is seeking "the forced enforcement of the contract" through the immediate purchase of the shares in terms of an option first granted in 1978 and compensation for breach of contract.
Platts quoteds Codelco CEO Diego Hernandez at the time:
"This is the only possible path when the counterparty acts erratically and breaches the contracts. I had never expected something like this from a world-class company."
The war of words has been escalating since November when The Telegraph reported Carroll took a last-minute flight to Santiago to calm tempers over the sale of a 24.5% stake to Mitsubishi Corporation but neither Chile’s president Sebastian Pinera, finance minister Felipe Larrain or mining minister Hernan de Solminihac would see her.
She is understood to have contacted all three before announcing the $5.39 billion deal that undermines state-owned copper giant Codelco’s plan to exercise the 33-year old option to buy half of Anglo’s Sur copper complex that includes the newly expanded $2.8 billion Los Bronces mine.
Anglo said the Mitsubishi transaction values its Chile properties at $22 billion. Codelco was offering $6 billion for 50%. Over and above the lowball offer from Codelco, what must really gall Anglo is that they would have had to pay around $1 billion in taxes on the transaction. Copper accounts for roughly a third of Anglo’s profits.
Image of Cynthia Carroll from WEF photostream on Flickr.