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Anglo sells zinc assets in $1.3bn deal

May 10 2010 09:48 David McKay

Company Data

Anglo American Plc [JSE : AGL]

Last traded R261.89
Change R-3.11
% Change -1.17%
Cumulative volume 4.99m
Market cap R351.71bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

Exxaro Resources Ltd [JSE : EXX]

Last traded R185.80
Change R0.55
% Change 0.30%
Cumulative volume 518,836
Market cap R65.86bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - Anglo American [JSE:AGL] 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

 
 
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