Chilean state mining firm Codelco said Monday it was exercising its option to buy a 49 percent stake in a copper mining venture held by Anglo American in the latest twist of a long legal battle.
Less than two weeks after the London-based firm filed a breach of contract suit against Codelco, the Chilean group -- the world's top copper producer -- said it had filed documents with market regulators to exercise the purchase option based on a 1978 contract between the two firms.
It said the British-South African Anglo American group refused to provide enough information for a final price, and that consequently it set the price at about $6 billion for the unit known as Anglo American Sur.
Codelco, which announced plans for the purchase in October, has said it would finance it under a deal with Japanese trading house Mitsui.
The legal dispute heated up when Anglo American announced it had sold a 24.5 percent stake in its Chilean copper activities to Japan's Mitsubishi Corporation for $5.39 billion.
Codelco swiftly filed suit in a bid to guarantee its right to purchase a full 49 percent share of Anglo American Sur (AAS), after the sale to Mitsubishi presumably reduced the stake available.
Anglo American countered on December 22 with a breach of contract suit, saying Codelco had prematurely sought to use its option and prevented the British-based firm from exercising its contractual right to sell to Mitsubishi.
On Monday, Anglo American reiterated in a statement that "it was under no obligation to sell any of AAS shares to Codelco."
"In line with Chilean legislation and since Codelco did not honor the contract, Codelco does not have the right to exercise its purchase option with respect to Anglo American Sur and therefore any claim to exercise this option is null and void," the statement said.
Anglo American again stressed that it was "open to working with Codelco to find a trade deal in the interest of shareholders of the two companies."
But analysts cited by Chilean media said that given the lack of agreement, a protracted legal battle could be expected.
"On average, five years for this type of cases," said Antonio Gaspar, a professor of commercial law at Diego Portales University in Santiago.
According to the 1978 contract, Codelco has the option every three years to buy up to 49 percent of AAS -- and the Chilean mining giant in October announced plans to do that in January 2012.
The deal would give Codelco control of the operations which include the copper deposits known as Los Broncos and El Soldado, as well as the Chagres smelting facility and exploration projects in Chile.
The unit, which last year produced about 260,000 tons of copper, would be integrated in Codelco's Andina division, and boost the output for the company which produces about 11 percent of the world's copper.
Anglo American is among the world's largest mining companies, listed on the London and Johannesburg stock exchanges.