In February 2025, a commercially significant agreement was announced between Chile’s state-owned copper company Codelco and Anglo American, one of the world’s largest diversified mining firms. Their joint mine plan for the neighbouring Andina and Los Bronces copper operations aims to unlock at least USD 5 billion in pre-tax value, with an estimated USD 3.75 billion expected to flow to the Chilean state via taxes, royalties and dividends. 

At its core, the joint mine plan is a pragmatic solution to capital constraints and regulatory pressures. As a former mining banker noted, “Both Codelco and Anglo American could cut costs by cooperating on infrastructure and logistics, as well as working out how best to access the next layer of ore between their respective sites.” The two mines are not only geographically adjacent, they also form part of the same ore body, creating “a unique geological and operational situation.”

“Both Codelco and Anglo American could cut costs by cooperating on infrastructure and logistics, as well as working out how best to access the next layer of ore between their respective sites.” 

Former mining banker specialising in LatAm

A former Chilean mining consultant highlighted that “these activities will be managed by a newly created ‘joint agent,’” rather than a joint venture (“JV”), as “Anglo American has publicly stated that this does not constitute a joint venture.” At its current stage, the agreement is limited to a Memorandum of Understanding (“MoU”) to establish a strategic alliance aimed at implementing the Joint Mining Plan. 

Pooling resources makes strong economic sense. Although, according to the mining consultant, “The mining industry as a whole is generally sceptical about the projected benefits.” The former consultant noted that many of Codelco’s projected developments and anticipated projects have fallen short of expectations. 

“The mining industry as a whole is generally sceptical about the projected benefits.”

Former consultant, Chile

With copper demand forecast to surge due to electrification and green infrastructure, maximising existing asset output, without incurring fresh permitting battles or ESG controversy, is commercially astute. “It would make use of capacity that is currently idle,” added a copper mining industry expert. 

Value distribution remains tied to asset ownership, with each party retaining full control over its concessions and infrastructure. “It is worth noting that the MoU specifies that the investments and costs required to develop this plan will be shared equally, with each party assuming 50 percent. Likewise, any profits generated through the joint plan will be equally divided, with 50 percent allocated to each company.” The former consultant continued, “As each company will maintain control over its own mineral extraction operations and properties, the overall mining output will be dependent on how much each company extracts and processes individually, in addition to what they may jointly achieve under the coordinated plan.” 

The deal stems from a well-established history of working together. “There is already a long-standing history of cooperation between the two adjacent mines, with each having better access to different mineral zones.” The copper expert continued, “For the past 30 years, they have worked collaboratively.” This proposal, therefore, is “a formalisation of that existing relationship,” not a leap into the unknown. However, the former mining consultant remained sceptical, doubting that the end-of-2025 deadline would be met. 

Regarding permitting, Chile’s “permisología” remains a key commercial bottleneck. A former employee of Codelco acknowledged, “There is a broad political consensus that the current delays in project approvals are costing the country several points of GDP.”  The mining banker added, “All projects whether public or private are subject to the same rigorous permitting processes,” but “I don’t expect permits and environmental issues to be a major problem for this partnership.” The source elaborated, “Both Los Bronces and Andina are already operating mines, which means that the environmental and social issues are already well-understood.” 

“Having Codelco at the table could certainly help ease some of the challenges,” observed the former employee, “but the overall impact would likely remain limited.” As for the broader potential of such agreements, “it’s hard to imagine many other mining companies pursuing similar arrangements.” Still, for Codelco and Anglo American, this isn’t just a financial strategy, it’s a partnership that strikes gold without drilling into debt.