Codelco and Anglo American have officially signed a Memorandum of Understanding (MOU) to establish a strategic alliance aimed at enhancing the development of the Andina-Los Bronces mining district. This collaboration, set to be executed through a Joint Mining Plan between 2030 and 2051, marks a significant milestone for Chile’s copper industry.
Key Benefits of the Joint Mining Plan
The Joint Mining Plan is expected to bring substantial benefits, including:
- Increased copper production without requiring significant additional investments from either company.
- Enhanced contributions to Chile in the short and medium term.
- Strengthening Chile’s position as a leading global copper supplier.
- Greater value generation for shareholders (with Codelco’s sole shareholder being the Chilean government), employees, suppliers, and local communities.
Chile will now host three of the world’s four largest copper mining operations, reinforcing the nation’s pivotal role in the global mining sector. This alliance further ensures that the benefits of Chile’s mining industry reach all its citizens.
Boosting Copper Production and Economic Impact
The agreement between Codelco and Anglo American will significantly increase copper production in Chile. The Andina-Los Bronces district is projected to produce an additional 120,000 metric tons of fine copper annually between 2030 and 2051, subject to regulatory approvals.
Chile is set to benefit directly from 75% of the resources generated by this unique public-private partnership. This will result in:
- A 2.8% increase in Chile’s copper production based on 2023 levels.
- An additional $5 billion in value creation, of which $3.75 billion will be allocated to the Chilean government through taxes, royalties, and profits to improve the quality of life for Chilean families.
The agreement also allows both companies to retain flexibility for separate projects, including underground resource development at Andina and the underground phase of the Los Bronces Integrated Project.
Structure of the Codelco-Anglo American Alliance
A fundamental principle of the MOU is that Andina and Los Bronces will retain full ownership of their respective mining concessions, processing plants, and physical assets.
The alliance’s operational structure will include:
- A joint corporate governance model with equal representation from Codelco and Anglo American.
- The creation of a new operational entity to execute the Joint Mining Plan and optimize the combined processing capacity of both operations.
- Independent mineral extraction by each company, though operations will be coordinated.
- Shared processing facilities, utilizing the infrastructure and capabilities of both companies.
- Equal division of copper production, costs, and operational responsibilities.
- Independent marketing and commercialization of the produced copper by each company.
The companies expect to finalize negotiations and binding agreements by the second half of 2025, pending relevant approvals and completion of due diligence. Once the agreements are signed, obtaining the necessary permits to implement the Joint Mining Plan is expected to take at least five additional years.
Environmental and Social Commitments
The alliance explicitly upholds the existing environmental and social commitments of Andina (Codelco) and Los Bronces (Anglo American). This includes:
- Protection of high-altitude Andean ecosystems and biodiversity, considering climate change’s impact on glaciers.
- Sustainable water management, including a commitment to eliminate the use of fresh continental water in mining processes amid Chile’s central region water scarcity.
- Community well-being and engagement, ensuring transparent, inclusive, and informed dialogue with local populations.
- Enhanced safety and traffic control measures, particularly in access routes to mining operations.
The historic partnership between Codelco and Anglo American represents a transformative moment for Chile’s mining industry. By increasing copper production, strengthening Chile’s position as a top global supplier, and generating substantial economic benefits, this agreement underscores the potential of public-private collaboration. As the mining sector advances, this alliance serves as a model for sustainable and socially responsible resource development, ensuring long-term benefits for the country and its people.
