Anglo American Delivers First Copper Output From Chile's Los Bronces

Nov 23, 2011 LONDON (Dow Jones)--U.K.-listed globally diversified miner Anglo American PLC (AAL.LN) said Wednesday that it has deliver its first copper production on schedule from the expansion project of its flagship Los Bronces mine in central Chile.

The Los Bronces expansion is expected to more than double on average the mine's copper output from 221,000 tons of copper in 2010 over the first three years of full production and is the second of Anglo American's four major strategic growth projects to begin production during 2011.

John Mackenzie, chief executive of Anglo American's Copper business, said: "We have delivered this major expansion of Los Bronces on schedule, thanks to the admirable hard work and dedication of the entire team of up to 16,000 people who have been working on the project over the last three years."

He said the project will take 12 months to ramp up to full production, during which time the processing plant throughput will increase to 148,000 tons from 61,000 tons of ore per day.

The $2.8 billion expansion project will allow Los Bronces to produce an additional 278,000 tons of copper a year during the first three years, according to the company's website.

At peak production levels, Los Bronces is expected to be the fifth largest copper mine in the world, with reserves and resources that support a mine life of over 30 years and with further expansion potential.

"We are driving volume growth across the most attractive commodities with a continued focus on long life assets with low cash operating costs," Anglo American's chief executive Cynthia Carroll said. "Looking at our copper business in particular, we have existing projects spanning Chile, Peru and the United States and exploration activities under way in several other geographies," she added.

Los Bronces mine is part of the prized Anglo American Sur Chilean copper complex, in which Anglo American sold a 24.5% stake to Japan's Mitsubishi Corp (MSBHY) earlier this month for $5.39 billion.

Chilean state copper giant Codelco has an option to buy a stake in the complex as of January but Anglo and Codelco are at odds over how much Codelco is allowed to buy. Anglo says Codelco can only acquire up to a 24.5% stake in the Sur complex while Codelco says the option is for 49% of the entire Sur complex.

Codelco won a court injunction to prevent Anglo American from selling any more of its 75.5% stake in the complex. Analysts viewed Anglo's sale to Mitsubishi as a positive move to extract more value from what was considered an eventual forced sale of a 49% stake in the Sur complex to Codelco for an estimated $6 billion.

At 0854 GMT, Anglo American shares were down 0.5% or 12 pence at 2,219.5 pence a share while the FTSE-350 mining index was down 1.1%.