“At a time when the mining industry is struggling to grow amid technical complexities and investment constraints, this agreement stands out as a model for collaboration that requires minimal capital and risk, almost akin to developing a new mine, but leveraging existing resources.”
By Juan Carlos Guajardo
The recent signing of a Memorandum of Understanding (MoU) between Codelco and Anglo American to jointly develop the Andina-Los Bronces mining district is a milestone that deserves broad recognition. This agreement, which sets the stage for a joint mining plan spanning 2030 to 2051, consolidates the fourth-largest copper mining operation in the world and further strengthens Chile’s privileged position, as the country hosts three of the four largest copper mining operations globally.
A key aspect of this agreement is its ability to overcome past challenges related to this deposit between both companies. It serves as a prime example of how learning from the past and building a shared vision for the future can lead to success.
The management capabilities of Codelco and Anglo American have allowed them to devise an innovative solution at a time when the mining industry faces significant challenges to sustain growth.
Following a lengthy process initiated in 2013, involving various phases from resolving operational interferences to defining a new governance structure, both companies have successfully reached a 50/50 equitable integration agreement. Under this framework, the mines will continue operating independently without any transfer of ownership, ensuring that extracted copper is evenly shared. This agreement is expected to generate an additional US$5 billion in value, with US$3.75 billion (75%) directly benefiting the Chilean state through taxes, royalties, and profits.
At a time when the mining industry is struggling to grow amid technical complexities and investment constraints, this agreement stands out as a model for collaboration that requires minimal capital and risk, almost akin to developing a new mine, but leveraging existing resources. Additionally, this public-private partnership paves the way for a more rational and sustainable use of the territory, optimizing the economic value of resources while reducing the risks associated with large-scale mining projects.
While these major synergies had long been recognized within the mining sector, the key to unlocking the value derived from the independent development histories of both mines had remained elusive—until now.
Ultimately, this historic agreement not only reinforces Chile’s position as a global leader in copper supply, adding 120,000 additional tons of copper per year, but also establishes a precedent for operational innovation in the mining sector. By pooling efforts and resources, Codelco and Anglo American have demonstrated that it is possible to turn longstanding challenges into opportunities for sustainable growth, optimizing production and strengthening the national economy without compromising sustainability or territorial safety.
We look forward to seeing this agreement come to fruition. This sets a precedent for exploring new mining cooperation agreements that can generate value in new areas of collaboration within Chile’s mining industry.
Source: La Tercera