Anglo American has signed a memorandum of understanding (MoU) with Codelco, a Chilean mining company. The agreement involves Anglo American’s subsidiary, Anglo American Sur SA (AAS), which owns 50.1% of the company. Both firms will work together on a joint mining plan for their neighboring copper mines, Los Bronces and Andina, in Chile.
This partnership aims to increase copper production with minimal additional investment. By collaborating, they plan to enhance the value of the mining district.
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Duncan Wanblad, Chief Executive of Anglo American, said,
“Copper is at the forefront of our growth ambitions and we already have a clear pathway to more than 1 million tonnes of annual copper production by the early 2030s, a 30% increase. Building on that growth pipeline, Los Bronces and Andina present obvious and significant adjacency benefits and together represent approximately 2% of global copper Resources and Reserves, with approximately 60 million tonnes of contained copper1. By putting in place a joint mine plan and optimising the use of our respective processing plants, we believe we can unlock an additional 2.7 million tonnes of copper production over a 21-year period from 2030 alongside other operational synergies made possible by coordinating our activities across the site. Anglo American and Codelco will both retain flexibility to develop separate standalone projects, including development of underground resources during the period of the joint mine plan in an appropriately coordinated manner.”
Unlocking the Anglo-American and Codelco Copper Mining Collaboration
Wanblad praised both companies’ technical teams for their years of collaboration. He also added that the partnership with Codelco has created a strong agreement that will help Anglo American, Codelco, their AAS partners, and local communities in Chile.
Shared Production, Costs, and Sustainable Mining
Both companies will share copper production, profits, costs, and risks equally. AAS and Codelco will keep full ownership of their mining assets. This includes land and processing plants. They will continue to operate separately.
The deal includes sustainability rules to protect the environment and support local communities. This commitment ensures both companies remain accountable for their social and environmental responsibilities. Additionally, it prioritizes protecting the high Andean ecosystems and biodiversity.
The agreement is expected to generate at least $5 billion in profit before taxes, with both companies splitting the earnings equally.
Timeline and Regulatory Approvals
They plan to finalize their review and sign agreements by late 2025. This depends on meeting key requirements, such as obtaining environmental permits and regulatory approvals. Until then, both mines will continue operating under the 2019 cooperation agreement.
The press release also revealed that according to Anglo American’s Ore Reserves and Mineral Resources Report and an S&P Global report,
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The copper reserves and resources under this MoU total about 60 million tonnes. This excludes reserves from separate underground projects at Los Bronces and Andina.
Anglo American’s Strong Copper Output with Future Growth Plans
Anglo American’s copper operations did well as highlighted in its q4 2024 earnings report.
Copper output increased by 9% from the last quarter, with Quellaveco leading the way But production was down 14% compared to 2023. This drop happened because of a planned shutdown at a smaller, expensive plant in Los Bronces. Also, lower ore grades at Collahuasi contributed to the decline.
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For 2024, copper production was between 730 and 790 kT. This covers operations in Chile and Peru. It does not include output from the Platinum Group Metals business.
Furthermore, the restructured Los Bronces mine runs efficiently. The company expects copper production to rise in 2026 and maintain steady production in 2027. This growth will come from higher-grade ore in Chile.
Commitment to Sustainable Mining
Anglo American’s Sustainable Mining Plan aligns with the UN’s Sustainable Development Goals (SDGs). These include bold goals for 2030.
Its environmental goals focus on climate action, biodiversity, and water conservation.
- For climate change, it aims to cut absolute Scope 1 and 2 greenhouse gas emissions by 30% by 2030 compared to 2016 levels. Additionally, it plans to enhance energy efficiency by 30% and achieve carbon neutrality at its eight mining sites.
- By 2040, the company targets full carbon neutrality across all operations and a 50% reduction in Scope 3 emissions compared to 2020 levels.
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The company aims for a net-positive biodiversity impact and a 50% cut in freshwater use in water-scarce areas by 2030.
Source: Anglo American
Codelco Revives its Copper Output
Codelco focuses on exploring, developing, and processing minerals. Its main products are refined copper and by-products for global markets.
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By September 30, 2024, copper production dropped 5%. It reached 988 ktons , down from 1,040 ktons last year. This figure includes Codelco’s share in El Abra and Anglo American Sur.
Despite challenges, Codelco reversed the trend. In the third quarter of 2024, its owned production increased by 1.7% compared to the same time in 2023.
2030 Sustainability Goals
In 2023, Scope 1 emissions totaled 1,797 ktCO2e, and Scope 2 emissions, from purchased electricity, reached 1,657 ktCO2e. Scope 3 emissions were the highest at 6,333 ktCO2e.
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The company aims for a 70% reduction in greenhouse gas emissions, powered by a 100% renewable energy matrix.
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It aims to cut PM10 (Particulate Matter with a diameter of 10 micrometers or smaller) emissions by 25% while adopting new dust suppression technologies and ensuring air quality meets safety standards.
Codelco plans to switch all underground mining equipment to electric options. They also support creating green hydrogen for industrial use.
Water conservation is also a key focus. Codelco plans to invest in a desalination plant and water recovery systems. This will help reduce inland water use by 60% for each ton of ore processed in the North District. These initiatives show Codelco’s commitment to a greener, more responsible future in copper mining.
However, it aims to become carbon neutral by 2050.
A New Model for Public-Private Collaboration
Máximo Pacheco, Chairman of Codelco, commented
“Codelco and Anglo American have been good neighbours for decades. This relationship has developed through more than 10 cooperation agreements between the two companies over half a century. Today, we have a unique opportunity to rethink the development of this mining district and take a strategic and beneficial step: moving forward with an alliance that will allow us to increase copper production by an average of nearly 120 thousand tonnes of fine copper per year, without any material additional investments. Considering total production, this district would become one of the three most important in Chile and the fourth worldwide. In this way, we will contribute a critical mineral for the transition to a decarbonized economy and generate additional value of at least $5 billion pre-tax, increasing our contribution in the short and medium term while strengthening Chile’s position as a leading global copper supplier.”
Máximo also emphasized the project as a unique example of collaboration between the public and private sectors. Overall, Codelco and Anglo American will share decision-making equally, ensuring balanced governance. While each company will operate its mines independently, they will coordinate efforts to uphold ESG commitments while boosting Chilean copper output.
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