Anglo American has signed a definitive agreement with Chilean state-owned copper miner Codelco over a joint mine plan for their adjacent Los Bronces and Andina copper mines.
The deal, announced in February, will see the two companies jointly operating the copper mines in a shift that promises to boost the operations’ pre-tax net present value by at least $5bn (R86.7bn).
By jointly operating the operations, the pair expects to increase the mines’ copper output by 120,000 tonnes per year, with unit costs expected to drop to about 15% below those of the stand-alone operations.
The news comes one week after Anglo’s mega merger with Canadian copper miner Teck Resources to form a $53bn copper behemoth called Anglo Teck, birthing one of the world’s biggest suppliers of the critical mineral.
“Copper is a vital resource for the global energy transition and is at the forefront of our growth ambitions,” Anglo CEO Duncan Wanblad said.
“Together we are unlocking the full value potential of these neighbouring assets and one of the world’s premier copper resource endowments, for the benefit of all stakeholders and, of course, for Chile,” he said.
The combined output of Los Bronces and Andina would rank within the top five copper mines globally under the joint mine plan, Anglo said in a statement.
“This step change is made possible by co-ordinating the mining of two adjacent resources with the existing plant capacity and infrastructure, positioning the alliance as a transformative development in the global copper industry and positioning the parties to set a new benchmark for innovation, efficiency and sustainability in mining operations.”
Anglo and Codelco will both retain flexibility to develop separate stand-alone projects, including development of underground resources during the period of the joint mine plan.
The deal comes as the world’s biggest mining companies have been scrambling to secure copper assets ahead of a potentially huge market shortfall.
Demand for copper is expected to surge more than 40% by 2040 and the metal’s dwindling supply placed it among the biggest drivers of SA mining’s mergers & acquisitions last year, according to a report by consulting firm PwC.
“I value that this process included the voices of workers, as well as the intense effort, remarkable capabilities and outstanding professionalism of our teams, who succeeded in reaching an agreement that had been waiting for years,” said Codelco chair Máximo Pacheco.
“We can now maximise the potential of the Andina-Los Bronces mining district without major investments and with significantly greater returns.
“This collaboration for sustainable mining will also help meet the urgent need for more critical minerals for the energy transition, in a world where copper production has so far remained stagnant.”
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