Anglo American acquires control of the Minas-Rio and Amapá
31 March, 2008
Anglo American has signed an agreement to acquire a 63.5% shareholding in a new company IronX, which will own MMX's current 51% interest in the Minas-Rio iron ore project and 70% interest in the Amapá iron ore system.
Anglo American plc (“Anglo American”) is pleased to announce that, following its announcement dated 17 January 2008, it has signed an agreement with the controlling shareholder of MMX Mineração e Metálicos S.A. (“MMX”), Mr Eike Batista, Chairman & CEO of MMX, and certain other MMX shareholders (together “the Selling Shareholders”), to acquire a 63.5% shareholding in a new company (“IronX”) which will be demerged from MMX and will own MMX's current 51% interest in the Minas-Rio iron ore project and 70% interest in the Amapá iron ore system. Mr Eike Batista will be Chairman of IronX.
Anglo American has committed, after completion of this transaction, to extend an offer to the minority shareholders of IronX at the same price per share paid to the Selling Shareholders, the successful completion of which would result in Anglo American owning 100% of the Minas-Rio project, 70% of the Amapá system and 49% of LLX Minas-Rio, the owner of the Port of Açu. Anglo American acquired 49% of the Minas-Rio project as part of its original investment announced in April 2007, which included 49% of LLX Minas-Rio. These two projects, together with the planned Kumba expansions, will significantly increase Anglo American's participation in the seaborne iron ore market to approximately 150Mtpa by 2017 in line with Anglo American's strategic goal to become a significant player in the iron ore industry.
IronX's gross assets at 31 December 2007, on a proforma basis, were R$2.2 billion (US$1.2 billion) with a proforma operating loss for the year of R$25 million (US$13 million). Anglo American will pay US$5.5 billion in cash for 100% of the issued and outstanding shares of IronX, or approximately US$361.12 per IronX share (assuming one IronX share for each current MMX share).
A further announcement will be made in due course.
Notes to editors:
Anglo American plc is one of the world's largest mining and natural resource
groups.
With its subsidiaries, joint ventures and associates, it is a global leader
in platinum group metals and diamonds, with significant interests in coal,
base and ferrous metals, as well as an industrial minerals business and a stake
in AngloGold Ashanti. The Group is geographically diverse, with operations
in Africa, Europe, South and North America, Australia and Asia. (www.angloamerican.co.uk)
MMX Mineração e Metálicos S.A. consists of integrated mining, mineral processing, production and logistics operations for iron ore and intermediate products for the steel industry. Principal projects include, MMX Corumbá System, MMX Amapá System,MMX Minas-Rio System and LLX Logística. (www.mmx.com.br)
The Minas-Rio iron ore project is located in the Minas Gerais state in Brazil. It will comprise a mine and beneficiation plant producing high-grade pellet feed. The pellet feed will be transported through a slurry pipeline to the Port of Açu which is being constructed in Rio de Janeiro State, with the potential for further pipelines and rail access.
The Amapá iron ore system is located in the Amapá state in Northern Brazil.
Construction of the Amapá system was completed recently, with initial production
in December 2007 and with annual capacity of 6.5 million tons per annum of
iron ore.
MMX currently owns 70% of the Amapá system and Cleveland Cliffs Inc. owns 30%.