Anglo American Signs $5 Billion Partnership With Codelco, DeBeers Weighs On Financial Results

Anglo American (OTCQX:AAUKF) has signed a $5 billion agreement with Chilean state-owned miner Codelco to develop their neighboring Los Bronces and Andina operations jointly. The deal will further strengthen the company's footing in the leading copper-producing region.

The production at those sites is set to begin in 2030, yielding 2.7 million tons of additional copper over 21 years. Anglo American owns the Los Bronces mine, which produced 215,000 tons of copper in 2023, while Codelco's Andina division, which includes the Rio Blanco and Sur Sur mines, produced 164,500 tons.

Both companies will retain full ownership of their assets and continue operating separately. Following the announcement, Anglo American shares surged over 5%.

"Copper is at the forefront of our growth ambitions," Anglo American CEO Duncan Wanblad said in the statement. "We already have a clear pathway to more than 1 million tons of annual copper production by the early 2030s, a 30% increase."

Codelco has a long history of working with private companies to boost production and efficiency. It currently owns a 49% stake in the El Abra copper mine with Freeport-McMoRan and a 42.3% stake in the Agua de la Falda project with Rio Tinto.

In 2023, it acquired a 10% stake in Teck Resources' Quebrada Blanca copper mine. The company is actively seeking new partnerships as it works to recover from declining production and growing debt.

Alongside the multi-billion-dollar partnership, Anglo American announced a full-year 2024 result, marking a net loss of $3.1 billion – largely due to a $2.9 billion impairment on the struggling De Beers diamond business. In contrast, Anglo had reported a net profit of $283 million in 2023.

Despite De Beers' challenges, Anglo American is moving forward with a plan to separate the business.

"The work to separate De Beers is well underway, with action taken to strengthen cash flow in the near term and position De Beers for long-term success and value realization," Wanblad said.

Regardless of the financial setbacks, Anglo American has made progress in its portfolio optimization efforts following BHP's $49 billion failed takeover last year. The company has agreed to sell its steelmaking coal and nickel businesses for up to $5.3 billion in gross cash proceeds, with the demerger of Anglo American Platinum expected in June.

Read Next:

• Bullion Boom: Gold ETFs Gain As Geopolitical Storm Fuels Surge

Photo via Shutterstock