SANTIAGO, Feb 20 (Reuters) -

Chilean state-run copper giant Codelco and

London-listed miner Anglo American signed a memorandum

of understanding to jointly operate neighboring copper mines in

central Chile, the companies announced on Thursday.

In a letter to the local regulator, Codelco said its

board of directors approved a deal to operate its Andina mine

alongside Anglo American's flagship Los Bronces mine in central

Chile outside the capital of Santiago.

"This memorandum of understanding will allow us to

jointly develop a mining plan for both joint deposits that are

right next to each other," Codelco's chairman Maximo Pacheco

told reporters in a press conference in Santiago.

He added that the deal would increase production by

120,000 metric tons a year for 21 years without the need for

additional investment.

Andina produced 164,500 metric tons of copper in 2023.

Los Bronces, meanwhile, is a key mine for Anglo American, with

output of 215,000 tons in 2023.

Codelco owns a 20% stake in Anglo American Sur, the

local Anglo American unit that includes Los Bronces.

Anglo American confirmed the agreement and said the rise

in production would start in 2030. Pacheco added that the deal

would force the company to review the development plan for its

Andina mine.

"There's a lot of aspects that are a win for both

companies," said Cristian Cifuentes, an analyst for the Center

for Copper and Mining Studies (CESCO), noting that details still

need to be finalized.

Cifuentes noted that Andina doesn't have the capacity to

process all the mineral it extracts with no feasible short or

medium-term solution, while Los Bronces has nearly double the

processing of Andina, a portion of which is idle.

Codelco said the company hopes to sign the final details

of the deal in the second half of this year. The project would

also need environmental permits, a process that has delayed

development for both projects.

Located in the Andes, the expansion has been fought by

environmental groups due to its potential impact on glaciers and

water availability in drought-stricken Chile.