South32 mulls acquisition of Anglo’s $1bn business in Brazil

South32 mulls acquisition of Anglo’s $1bn business in Brazil

Anglo American mines the majority of its niobium ore from the Boa Vista open pit, in Brazil. (Image courtesy of Anglo American via Flickr)

Mining scene newcomer and BHP spin-off South32 (ASX, LON, JSE:S32) may make an offer for Anglo American’s $1 billion niobium and phosphate business in Brazil, Bloomberg reports.

Citing people familiar with the matter, Bloomberg says the company is seeking to hire an adviser to assist in the bidding process.

Investors reacted positively to the news. The company was trading more than 5% higher in London early afternoon to 45.3p and closed slightly higher in Sydney Wednesday.

South32 CEO Graham Kerr has said the company is open to making value-adding acquisitions despite current market conditions.

Last week, the Perth-based company warned it might post its first asset impairment, with a review of its stake in the Samancor joint venture now under way.

South32 inherited BHP Billiton's 60% in the Samancor joint venture, with Anglo American (LON:AAL) owning the rest of a business stretching from the Gulf of Carpentaria to Tasmania and as far west as South Africa.

The diversified miner, created last year in the mining sector’s biggest spinoff in about a decade, holds bauxite and alumina assets in Australia and Brazil and owns aluminum smelters in South Africa and Mozambique. Other assets include manganese, coal, nickel, silver, lead and zinc in SA, Australia and South America.