Chile: To Have and to Own

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The Anaconda Co., the world's biggest copper producer, refused two years ago to sell Chile any portion of its huge Chuquicamata and El Salvador mines, the source of 61% of the company's annual production and half of its earnings. Since then, the Latin American political winds have shifted. Last week Anaconda management decided that paid-for nationalization of the two mines, offered by moderate President Eduardo Frei, was better than the outright expropriation that Chilean leftists were demanding.

The company agreed to sell Chile 51% of its mines on next Jan. 1 for about $200 million. The remainder is to be sold after 1972 for a price still to be determined. Anaconda will continue to manage the mines for an annual fee of approximately 1% of sales, or roughly $5 million.

The agreement on the mines was a political triumph for Frei, whose shaky Christian "Democrat party must face a rising leftist challenge in the 1970 elections. But Anaconda stock dropped to a new low for the year, and company executives said that they did not know how Anaconda would make up its Chilean losses.