Anglo American has confirmed that it will be selling its nobium and phosphates businesses for US$1,5bn to China Molybdenum Co. Ltd (CMOC), as part of its restructuring and debt reduction strategy.
The wholly-owned niobium and phosphates businesses are located in the states of Goiás and São Paulo, in Brazil. The phosphates business consists of a mine, beneficiation plant, two chemical complexes and two further mineral deposits. The niobium business consists of one mine and three processing facilities, two non-operating mines, two further mineral deposits and sales and marketing operations in the United Kingdom and Singapore. Together, the businesses generated EBITDA of US$146m in the year ended 31 December 2015.
Commenting on the move, Mark Cutifani, chief executive of Anglo American, says: “The sale of our niobium and phosphates businesses is another positive step forward in the strategic reshaping of Anglo American that we set out in February.” “The proceeds from this transaction, together with the ongoing productivity and cost improvements we are driving through the business, will enable us to continue to reduce our net debt towards our targetted level of less than $10bn at the end of 2016. This transaction confirms our commitment to creating the new Anglo American, positioned to deliver robust profitability and cash flows through the price cycle.”
The transaction is conditional upon customary People’s Republic of China regulatory approvals, and the approval of CMOC shareholders. Anglo American received binding commitments from the two major CMOC shareholders holding 63% of CMOC shares to support the transaction, which is expected to close in the second half of 2016.
The total consideration will be payable to Anglo American at closing, subject to certain closing and post-closing adjustments.