Anglo American (LON: AAL) and Chile’s state-owned Codelco have entered into an agreement to jointly develop their neighboring Los Bronces and Andina operations. This collaboration is expected to yield 2.7 million tonnes of additional copper over 21 years, starting in 2030.
The joint mine plan is projected to deliver a pre-tax net present value boost of at least $5 billion, with both companies sharing the benefits equally. Despite the partnership, Anglo American and Codelco will retain full ownership of their respective assets, including mining concessions, plants, and ancillary operations, continuing to extract resources separately.
Codelco’s Andina division, which includes the Rio Blanco and Sur Sur mines, produced 164,500 tonnes of copper in 2023. Anglo American’s Los Bronces operation, a key asset for the company, produced 215,000 tonnes in the same year. Codelco already holds a 20% stake in Anglo American Sur, the local unit managing the Los Bronces and El Soldado mines, as well as the Chagres smelter.
Anglo American has been undergoing a strategic restructuring to focus on copper and iron ore, following a $49 billion takeover bid from BHP (ASX: BHP) last year. CEO Duncan Wanblad emphasized the company’s commitment to copper as a central growth driver, with a clear pathway to increase annual copper production by more than 1 million tonnes by the early 2030s, marking a 30% rise.
Codelco chairman Máximo Pacheco highlighted the longstanding partnership between the two companies. “Codelco and Anglo American have been good neighbors for decades,” he said. “This relationship has developed through more than 10 cooperation agreements over half a century. Today, we have a unique opportunity to rethink the development of this mining district.”
The collaboration comes as mining companies worldwide are forming alliances to cut costs and boost output in the face of rising project complexities, supply-chain disruptions, inflation, and tougher permitting requirements.
Codelco, with a long history of private-sector partnerships, holds a 49% stake in El Abra alongside Freeport-McMoRan and a 42.3% stake in the Agua de la Falda copper project with Rio Tinto. Last year, Codelco acquired a 10% stake in Teck’s Quebrada Blanca copper mine, which is expected to add 25,000 to 30,000 tonnes of copper to its annual output. The company is actively seeking further private-sector partnerships to recover from a production slump and address mounting debt.
Meanwhile, Anglo American’s shares surged following the announcement of the deal, despite a $2.9 billion write-down on its struggling De Beers diamond business, adding to a previous $1.6 billion impairment. Anglo’s stock rose by over 5% in London, pushing its market capitalization to £33.2 billion ($42 billion), and marking a 44% increase in stock value over the past year.
The write-down contributed to Anglo booking total net impairments of $3.8 billion for 2024, resulting in a wider-than-expected loss. The company reported a net loss of $3.07 billion for the year, significantly surpassing analysts’ expectations of a $116.9 million loss, compared to a net profit of $283 million in 2023.