3rd Dec 2024 07:43
(Alliance News) - Anglo American PLC said on Tuesday it has tied up its acquisition of the Serra da Serpentina iron ore project from Brazilian miner Vale SA.
The London-based diversified miner first agreed to buy its iron ore project from the Brazilian miner in February.
Anglo American said Serpentina, which contains a mineral resource of 4.3 billion tonnes of iron ore, will be merged into its Minas-Rio operation in Brazil.
"The premium quality Serpentina iron ore resource is contiguous to, and will be integrated into, Anglo American's Minas-Rio operation in Brazil, in partnership with Vale," the company said.
Anglo American will continue to control, manage and operate the Minas-Rio operation, including any future expansions of Serpentina.
Under terms of the transaction, Vale is transferring Serpentina and will pay USD157.5 million in cash to acquire a 15% shareholding in the enlarged Minas-Rio.
Vale also has an option to acquire an additional 15% shareholding in the enlarged Minas-Rio for cash if and when certain events relating to a future expansion of Minas-Rio occur.
"This is a compelling example of industrial logic - putting together the contiguous resources of Minas-Rio and Serpentina to unlock significant value," Anglo American Chief Executive Officer Duncan Wanblad said.
Integration will generate "material synergies" through utilisation of Minas-Rio's infrastructure to accelerate the development of Serpentina, Wanblad said.
"It's an outstanding resource with a total orebody strike length more than double that of Minas-Rio with a higher iron ore grade than Minas-Rio's premium grade ore as well as softer, friable ore, which should translate into lower unit costs and capital required for its extraction," he said of Serpentina.
Shares in Anglo American were up 0.9% at ZAR593.95 each in Johannesburg on Tuesday morning, ahead of the opening bell in London.
By Artwell Dlamini, Alliance News reporter
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