Anglo American believes new Codelco chief executive may allow resolution in dispute over Chilean subsidiary, outgoing CEO not likely to compromise
DIEGO Hernandez, the CEO of Codelco, Chile’s state-owned miner, is stepping down as head of the world’s largest copper producer, a move analysts say could help defuse the stand-off withAnglo American.
Mr Hernandez will depart on Friday for “personal reasons” and will be replaced by Thomas Keller, Codelco’s chief financial officer. The announcement came last week after both parties said they had suspended legal action to find an out-of-court solution to the dispute over Anglo’s Chilean subsidiary,Anglo American Sur.
“We believe the change in the Codelco CEO could also allow a more rapid resolution to the dispute. In our view, it was difficult to see a situation where Mr Hernandez could reach a compromise resolution, given his stated position on the matter,” Goldman Sachs said in a note on Friday.
“Mr Keller recently presented the Codelco side of the dispute to the London investment community, but we do not believe this will encumber him in negotiating with Anglo. Mr Keller has previously served as executive president of the Collahuasi JV (joint venture), where Anglo is a 45% stakeholder,” it said.
Anglo said earlier last week the two parties had suspended their legal battle with each other over a disputed sale of 24,5% of Anglo American Sur to Japan’s Mitsubishi. The court-sanctioned decision has given the parties a target date of June 22 to find a settlement. Talks held between the parties in December and January proved fruitless.
Codelco argued that under a 1978 agreement renegotiated by Anglo in 2002 it had the option to buy up to 49% of Anglo American Sur and that Anglo acted in bad faith by selling off part of that stake to a third party.
Anglo CEO Cynthia Carroll has consistently maintained Anglo acted within the confines of the agreement and in the best interests of its shareholders.
Source: Business Day