Anglo American files breach of contract suit in Chile

22nd December 2011, Comments 0 comments

Global miner Anglo American said it filed a breach of contract suit Thursday against Codelco amid a row over efforts by Chile's state mining giant to buy up a 49 percent stake in Anglo American Sur.

The suit is the latest twist in a tussle that heated up last month when Anglo American announced it had sold a 24.5 percent stake in Chilean copper activities to Japan's Mitsubishi Corporation for $5.39 billion.

Codelco, the world's top copper producer, swiftly filed suit in a bid to guarantee its right to purchase a full 49 percent stake in the shares of Anglo American Sur, after the sale to Mitsubishi presumably reduced the largest stake of AAS that Codelco can buy to 24.5 percent.

Thursday's suit filed with the Court of Appeals in Santiago states that Codelco breached its option agreement for AAS through "actions aimed at preventing Anglo American from exercising its contractual rights under the option agreement," Anglo American said in a statement.

"The action seeks to render ineffective the potential future exercise of the option by Codelco and also seeks damages," the company said, while not outlining the damages sought.

According to a 1978 contract, Codelco has the option every three years to buy up to 49 percent of AAS -- and the Chilean mining giant in October announced plans to do that in January 2012.

"We continue to be open to reaching a mutually agreeable commercial solution with Codelco for the benefit of all our shareholders and ultimately for Chile," Anglo American's chief executive Cynthia Carroll said in the statement.

"While both Anglo American and Codelco have taken legal measures, this does not detract from our willingness to reach agreement with Codelco."

© 2011 AFP

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