Mitsui's direct ownership amounts to roughly 5%, but it will have the right to market the entire output share from its JV with Codelco, totaling 120,000 t/y of copper
Japanese trader Mitsui & Co said it would get the right to market a larger-than-expected share of production from Anglo American's Chilean mining unit after it backed Chile's Codelco in a battle for a stake.
Anglo and Codelco, the world's largest copper producer, reached an out-of-court deal on Thursday that ended a 10-month row over the stake in Anglo American Sur.
Codelco and Mitsui, who financed Codelco with a $1.9 billion loan, together now have 29.5 percent, while Anglo's share falls to 50.1 percent.
Mitsui's direct ownership amounts to roughly 5 percent, but it will have the right to market the Codelco-Mitsui venture's entire output share, 120,000 tonnes of copper per year, from the unit's south-central Chilean assets, which include the Los Bronces copper mine, slated to become the world's fifth biggest.
The mining industry worldwide has watched the prolonged dispute over Anglo's Chilean mines as avid Chinese demand for metals pressures miners to scramble for the few promising copper deposits left to exploit.
"There are few locations around the world where copper output is increasing, and at the same time demand from developing countries including China is very strong," said Yasushi Takahashi, chief operating officer of Mitsui's Mineral & Metal Resources Business Unit, said on Friday.
"The bottom line is we expect the tight copper market to continue," Takahashi said at a press briefing in Tokyo.
Mitsui said it would sell most of the concentrate to Japanese smelters.
Copper prices have fallen 13 percent from this year's peak of $8,765 per tonne in February, as global economic growth including in China has slowed, but miners and analysts say tight supply is likely to support the price.
Under the deal over Anglo American Sur, the business's profit will be distributed among the partners and all will now have a pro-rata share of production to market, or offtake. Mitsui will also get Codelco's share of offtake.
The Japanese company will also receive 30,000 tonnes per year of copper from other Codelco assets, which it secured in return for agreeing to provide the Chilean company with a loan to buy the Sur stake.
That brings its offtake to 150,000 tonnes per year, as much as 10 percent of Japan's annual imports of 1.4 million to 1.5 million tonnes, Mitsui officials said.
Japan's cash-rich trading houses have been taking advantage of a strong yen to scoop up commodities and minerals assets around the world.
Mitsui will pay $1.1 billion for its direct 5 percent stake in Anglo American Sur, which could rise to 9.5 percent at a later date should Codelco decide to repay part of the loan with more shares in their joint venture.
Codelco and Mitsui may explore further mining opportunities together in Chile or internationally, Codelco said in a statement to Chile's regulator on Thursday.
"If there's a chance to develop new copper mines in Chile or abroad, we would seriously consider accepting proposals to help Codelco do that," Takahashi said.
Source: Reuters
