Johannesburg - Anglo American has taken another crucial step in the divestment
of non-core assets after agreeing on Monday to sell its zinc mines for
$1.3bn to Vedanta, the London-listed, Indian mining group.
"This agreement represents an important milestone in our strategy to
focus on our core commodity businesses and on the delivery of our
exciting near term growth from our $17bn of approved projects," said
Cynthia Carroll, CEO of Anglo American.
Anglo American Zinc comprises the Skorpion mine in Namibia, the Lisheen
mine in Ireland, and a 74% interest in Black Mountain Mining in South
Africa, which holds 100% of the Black Mountain mine and the Gamsberg
project.
Of the total consideration, $698m relates to the Skorpion mine, $308m
relates to the Lisheen mine and $332m relates to Anglo American’s 74%
interest in Black Mountain Mining.
Interestingly, the deal should see the development of the Gamsberg
prospect which has long been known in southern Africa but not attempted
before owing to the high level of contaminants in the orebody.
"We intend to rapidly develop Gamsberg, one of the largest high quality
zinc projects in the world, leveraging our world-class large project
development expertise," said Anil Agarwal, chairperson of Vedanta.
One complication ahead of finalising the deal is that Exxaro Resources,
Anglo American's empowerment partner in Black Mountain Mining, has a
pre-emptive right to match Vedanta's offer.
It already owns 26% of
Black Mountain.
Completion of the transaction is expected to be in stages, with
separate completion dates for Skorpion, Lisheen and Black Mountain
Mining, Anglo American said.
"The successful sale of Anglo American Zinc for $1,338m following our
announcement in October last year is testament to the high quality of
the business and its management team," said Carroll.
Anglo American has divested of a number of assets in the last few years
including its 51% stake in AngloGold Ashanti, and investments in Mondi,
a paper producer and Tarmac, an aggregates company.
Carroll has said in the past the focus would fall on bulk minerals such as iron ore and coal, copper, platinum and diamonds.
- MiningMX