Chile Codelco mulls IPO for international unit

Mon Aug 27, 2012 6:53pm IST

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* Codelco ponders IPO to fund international opportunities

* Business plan to be presented to board before year-end

* Codelco says int'l plans delayed by Anglo copper row

SANTIAGO, Aug 27 (Reuters) - World No. 1 copper producer Codelco is mulling an initial public offering for its international unit to raise funds for potential mining projects outside Chile, CEO Thomas Keller said in an interview.

State miner Codelco intends to present the international unit's business plan to its board before year-end, Keller told local newspaper Diario Financiero.

"What we're thinking to start off with is to have this vehicle, which will be controlled by the corporation, and allow the entry of other partners and maybe of capital market in its proprietary structure," Keller said. "This is because there clearly isn't space in Codelco's balance sheet, nor capacity, to take on debt to finance projects abroad."

Copper heavyweight Codelco lacks a significant presence outside Chile, save for a few exploration projects in Latin America.

Development of the firm's international unit was delayed by a 10-month option contract tussle with global miner Anglo American, which was settled last week, Keller said.

Under the settlement, a joint venture formed by Codelco and its financing partner, Japan's Mitsui & Co, will own a 29.5 percent chunk of Anglo's disputed central-south Chilean copper assets.

Mitsui will pay $1.1 billion for its direct 5 percent stake in Anglo American Sur, which could rise to 9.5 percent at a later date should Codelco decide to repay part of the loan with more shares in their joint venture.

Codelco and Mitsui could explore further mining opportunities together in Chile or internationally, Codelco said last week.

"Clearly, if we think of international business and Mitsui's experience, in sales as well as in finance, it's clearly an exceptional candidate to accompany us in one or more initiatives," Keller told Diario Financiero.

"I admit we don't currently have anyone in mind, but our experience with Mitsui in this transaction ... obviously creates a propitious climate for other joint initiatives."

Codelco's profit lands in Chile's coffers, so the company is constantly seeking ways to finance its ambitious domestic expansion plans without compromising its enviable debt rating. Previous suggestions that the miner could be partially privatized prompted a public outcry.

Keller did not mention how big an initial public offering could be nor when it might be launched.

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