SANTIAGO (Reuters) -Chilean state-run copper giant Codelco and London-listed miner Anglo American (JO:AGLJ) signed a memorandum of understanding to jointly operate neighboring copper mines in central Chile, the companies announced on Thursday.
In a letter to the local regulator, Codelco said its board of directors approved a deal to operate its Andina mine alongside Anglo American’s flagship Los Bronces mine in central Chile outside the capital of Santiago.
"This memorandum of understanding will allow us to jointly develop a mining plan for both joint deposits that are right next to each other," Codelco’s chairman Maximo Pacheco told reporters in a press conference in Santiago.
He added that the deal would increase production by 120,000 metric tons a year for 21 years without the need for additional investment.
Andina produced 164,500 metric tons of copper in 2023. Los Bronces, meanwhile, is a key mine for Anglo American, with output of 215,000 tons in 2023.
Codelco owns a 20% stake in Anglo American Sur, the local Anglo American unit that includes Los Bronces.
Anglo American confirmed the agreement and said the rise in production would start in 2030. Pacheco added that the deal would force the company to review the development plan for its Andina mine.
"There’s a lot of aspects that are a win for both companies," said Cristian Cifuentes, an analyst for the Center for Copper and Mining Studies (CESCO), noting that details still need to be finalized.
Cifuentes noted that Andina doesn’t have the capacity to process all the mineral it extracts with no feasible short or medium-term solution, while Los Bronces has nearly double the processing of Andina, a portion of which is idle.
Codelco said the company hopes to sign the final details of the deal in the second half of this year. The project would also need environmental permits, a process that has delayed development for both projects.
Located in the Andes, the expansion has been fought by environmental groups due to its potential impact on glaciers and water availability in drought-stricken Chile.