South African mining group Anglo American has completed the purchase of Disputada de Las Condes, the Chilean copper mining subsidiary of US oil giant Exxon Mobil for US$1.3bn.


The deal was first announced in May and was expected to close by the end of June but was held up by a row over the fate of an option held by Chilean state minerals company Enami to 49% of Disputada, and over how much tax should be paid on the transaction.

The Enami option was not in the original contract of sale, but the question was finally cleared up in October. The tax issue was resolved a month earlier after London-based Anglo American and the Texas oil group agreed to carry out the transaction on Chilean soil rather than as on offshore deal.


Enami and Exxon both went to court over the option issue, but withdrew their legal action after the state company’s right to the 49% was recognised in the final draft of the contract.

The option, valid until 2028, allows Enami to take up the stake if Disputada is sold on to another company, and/or every three years. Enami acquired the option by selling Disputada to Exxon in 1978, but under that contract the right to the share would be worth more than the market value of the assets.

Under the 1978 sale, the option is to buy shares in Disputada, but in 1998 Exxon converted the company into a limited partnership without shares and so the status of the option became unclear.

Exxon and Anglo had planned to carry out the sale offshore, and thereby avoid paying capital gains tax. However, the Chilean government introduced modifications to proposed legislation passing through congress that would have subjected offshore sales to capital gains, potentially landing Exxon with a US$300mn tax bill. The companies then agreed to carry out the sale in Chile, and pay some US$40mn in tax instead, as capital outlays would be deductible from the taxable amount. The Chilean government has denied all along that it wanted to scupper the deal.

Disputada has the 180,000t/y Los Bronces and 70,000t/y El Soldado copper mines and Chagres smelter, all in central Chile. The company produced 252,000t of copper last year, 17,000t in cathodes and the rest in concentrates processed either at Chagres, which has installed capacity of 150,000t, or other smelters.

Exxon is in the process of expanding Los Bronces mine by 60,000t at a cost of US$200mn.

When Exxon put Disputada up for sale in August last year, Chile’s state copper corporation Codelco wanted to acquire the company and combine the operations of Los Bronces with the Rio Blanco mine at its own 250,000t/y Andina division as the two share the same orebody. But Exxon turned down Codelco’s bid in February, paving the way for the deal with Anglo.

Under the sale agreement, Anglo could have to pay up to US$120mn more to Exxon, depending on future copper prices.