Anglo to sell business units for $1.5bn

Johannesburg - Anglo American [JSE:AGL], the London-based mining giant, agreed to sell its niobium and phosphate businesses to China Molybdenum for $1.5bn in cash in its first big disposal since outlining its dramatic turnaround plan in February.

The unit that mines niobium, a metal used to make specialty steel products, operates one mine and three processing facilities. In phosphates, the deal will include a mine, processing plants, and chemical complexes. Anglo rose as much as 4% to 725 pence and traded at 718.4 pence in London.

The deal is part of a turnaround plan set out by chief executive officer Mark Cutifani after a slump in global commodity prices saw Anglo become worst performer in the UK’s FTSE 100 Index last year. It is selling more than half its mines and exiting the iron-ore and coal business to focus on its more profitable assets - diamonds, platinum and copper.

"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," Cutifani said in a statement on Thursday.

Anglo, which has more the doubled in value in 2016, is seeking to raise $4bn in asset sales this year to cut its debt.

While it has already offloaded coal assets for nominal fees, this deal is the first big step to reaching that goal.