Mitsui raise stake in Anglo American Sur

Codelco, Chile’s state copper mining company, has agreed to allow Mitsui, the Japanese trading house, to boost its stake in their joint venture investment in Anglo American’s Chilean holdings as part of a loan refinancing agreement that slashes the amount due to be repaid, extends the loan maturity and chops the interest rate.

Under the $998m deal, which had been expected, Mitsui will take 15.25 per cent of the shares in Acrux, the Codelco and Mitsui venture which controls 29.5 per cent of Anglo American Sur. That translates into a 4.5 per cent stake in Anglo Sur itself. Codelco will retain 67.8 per cent of Acrux.

“One of the company’s main reasons for accepting [Mitsui’s] refinancing offer was the significant difference in interest rate when compared with the original loan, which will imply an additional benefit to Codelco of approximately $300m,” Codelco said.

Mitsui lent Codelco $1.87bn in August to buy a 24.5 per cent stake of Anglo Sur as part of a four-way arrangement between Codelco, Anglo, Mitsui and Mitsubishi, another Japanese trading house, that put an end to a bitter year-long battle for assets including Anglo’s star Los Bronces copper mine.

Codelco’s original loan from Mitsui had been over 7.5 years at a variable interest rate of Libor plus 2.5 per cent per year, and dividends from Anglo Sur were due to be used to repay it.

The agreement now reduces that debt by $998m and refinances the remaining $875m over 20 years at a fixed annual rate of 3.25 per cent with a payment mechanism that allows Codelco to direct a large part of dividends from its stake in Anglo Sur to its own investment projects, the company said in a statement.

“This opens a new financing channel for our investment plan, which calls for almost $25bn in the coming years,” said Thomas Keller, Codelco’s chief executive.