29 Apr Anglo American to sell Brazilian units for $1.5b
Mining giant Anglo American (LSE:AAL) has reached a US$1.5 billion deal with China Molybdenum Co Ltd for the sale of its niobium and phosphates businesses in Brazil, the firm announced yesterday.
The sale is part of its ongoing move to deposit noncore assets to reduce debt.
The severance of its niobium and phosphates business, which is made up of mines, plants, processing facilities, chemical complexes and deposits was regarded as one of Anglo’s more commercial businesses.
Both businesses generated $119 million in earnings last year or the five per cent of the firm’s total $2.2 billion.
The businesses could have turned Anglo American into the world’s second-largest producer of niobium. The material is used in high-temperature alloys for jet engines and lightweight steel for automobiles.
Mark Cutifani, Anglo’s CEO said: “The proceeds from this transaction will enable us to continue to reduce our net debt towards our targeted level of less than $10 billion at the end of 2016.”
The resources enticed interest from other mining companies such as South32 (ASX, LON, JSE: S32), US fertiliser company Mosaic (NYSE:MOS) and Switzerland’s Vale SA (NYSE: VALE).
The agreement is conditional until approval from China, but the firm said it already had commitments from 63 per cent of holders from China Molybdenum and is expected to close at the end of this year.