Anglo American has signed a memorandum of understanding (MoU) with Chilean state-owned miner Codelco, outlining a joint mine plan expected to generate a pre-tax net present value (NPV) uplift of at least $5bn.

The agreement, involving Anglo American’s 50.1%-owned subsidiary Anglo American Sur (AAS), will coordinate operations at the companies’ adjacent copper mines in Chile, namely the Los Bronces and the Andina mines.

A new operating company, jointly owned and controlled by AAS and Codelco, will oversee the execution of the plan, optimising processing capacity across both operations.

Copper production and generated value, as well as associated costs and liabilities, will be shared equally.

However, both companies will retain full ownership of their respective assets, including mining concessions, plants, and infrastructure, and will continue to exploit their concessions independently.

The MoU also sets out sustainability principles to guide the implementation of the joint mine plan, ensuring the protection of social programmes and existing environmental commitments.

Codelco chairman Máximo Pacheco said: “This project represents an unprecedented public-private collaboration model globally, with a corporate governance structure equally composed of Codelco and Anglo American.

“Each company will conduct its mining operations independently but in a coordinated manner, safeguarding the current socio-environmental commitments of both and placing the protection of high Andean ecosystems and their biodiversity at the centre.”

Anglo American and Codelco aim to finalise due diligence and enter into definitive agreements in the second half of 2025.

The agreements remain subject to environmental permit approvals and regulatory clearances. Until then, both copper mines will continue to operate under the terms of a 2019 cooperation agreement.

The 60 million tonnes of copper contained in the resources and reserves of the Los Bronces and the Andina mines under the MoU do not include endowments from the the Los Bronces underground project or the Andina’s underground options.

Anglo American chief executive Duncan Wanblad said: “Our technical teams have been working together for many years to identify the optimal configuration to unlock the full value of this extraordinary mining district.

“We are delighted that our work with Codelco has created the foundations for an agreement that can create very significant additional value for Anglo American and Codelco, for our JV partners in AA Sur and other stakeholders, and for Chile.”

Earlier this week, Anglo American agreed to divest its nickel business to MMG Singapore Resources, a wholly owned subsidiary of MMG, for a cash consideration of up to $500m.

The transaction, which covers Anglo American’s nickel operations in Brazil, was part of the company’s broader strategy to divest non-core assets and focus on copper and iron ore mining.