A forklift truck lowers a copper slab onto wooden blocks for storage in Hamburg, Germany, in this file photo.Krisztian Bocsi/Bloomberg
Anglo American Plc finally hung the 'for sale' sign on two of its Chilean copper mines, and the assets don't look pretty.
For about six months, the London-based mining giant has been getting its Mantoverde and Mantos Blancos mines ready for sale.
When Anglo first started gauging whether there was any interest in the mines, copper was one of the few commodities whose prices had not been decimated.
But the spot price of the red metal has since dropped to around $2.50 (U.S.) per pound, shining a light on the mines' high costs.
Anglo spends around $2 to produce a pound of copper at Mantoverde and $2.20 at Mantos Blancos, according to documents viewed by the Globe and Mail.
That excludes treatment and refining expenses, which could push production costs closer to $2.50 per pound. At today's copper prices, Anglo is most likely losing money on the mines.
Also, both mines have been producing less and less copper over the past five years. And although Anglo says the mines could continue producing metal for another 15-20 years, they can only do so if the new owner invests in expanding the mines.
Like the rest of the mining industry, which is grappling with the ongoing rout in commodity prices, Anglo is under intense pressure to streamline its business.
The company is also considering the sale of the El Sodado copper mine and the Chagres smelter in Chile, both of which it jointly owns with Codelco and Mitsubishi. Anglo, which holds the controlling stake, is currently discussing the sale with its partners.
In addition to the South American copper assets, the miner wants to sell its Australian coal and platinum assets as well as its stake in construction company Lafarge Tarmac Holdings Ltd.
A spokesman for Anglo said he could not comment on specifics, but said the company had announced in February that it would put the Chilean copper assets on the market this year.
The Globe and Mail first reported in September that Anglo was planning to divest the Chilean mines.
Morgan Stanley and Goldman Sachs are running the sale.
Rachelle Younglai