Codelco, Chile's state-owned copper company, reached a deal Thursday to acquire the Chilean copper properties of London-based mining giant Anglo American Plc. at a discounted price, ending a 10-month legal dispute.

Codelco will acquire a 24.5 percent stake in Anglo's AAS unit for $1.7 billion, while a joint venture between the state mining firm and Japanese trading house Mitsui will purchase another 5 percent in AAS for $1.1 billion, Codelco and Anglo said in a joint statement.

Under the deal, Anglo will reduce its stake in AAS from 75.5 percent to 50.1 percent, while Japan's Mitsubishi, which purchased a 24.5 percent interest in the unit last November, will be left with 20.4 percent.

The dispute erupted when Anglo sold the 24.5 percent stake in AAS to Mitsubishi for a whopping $5.39 billion on Nov. 9, just weeks after Codelco announced that in January 2012 it would exercise a decades-old option for a 49 percent stake in the unit at a heavily discounted price.

To finance the purchase, Codelco, the world's largest copper producer, obtained a $6.75 billion bridge loan from Mitsui.

Anglo and Codelco had launched a legal battle over the dispute, although they suspended those proceedings in May and began talks aimed at reaching an out-of-court settlement.

Codelco CEO Thomas Keller said the agreement with Anglo reaffirms the state miner's position as the world's largest copper producer and gives a boost to the execution of its investment program.

Codelco's stake in AAS will give the company an additional 115,000 tons of copper output over the first five years, equivalent to roughly 7 percent of its current annual production, Keller told reporters.

He said AAS's assets, including the Los Bronces and El Soldado copper mines, a smelter and two projects in the exploration phase, hold "the world's largest copper reserves."

Los Bronces, which recently underwent a $2.8 billion expansion, is one of the world's most coveted copper properties.

Keller said acquiring such a sizable stake in AAS was a move of "strategic importance," adding that the agreement with Anglo would not have been possible if the negotiations "had not unfolded in an atmosphere of trust and good faith."

For her part, Anglo American CEO Cynthia Carroll said in a statement that the deal announced Thursday "demonstrates Anglo American's and Codelco's focus on our future and potential as partners in the best interests of both companies."

The two mining giants said all transactions will be settled in cash.

AAS's shareholders, meanwhile, signed an accord establishing that Anglo will retain control over the company and grant board representation and participation in certain decisions to Mitsubishi and the joint venture between Codelco and Mitsui. EFE