As of October 1, 2016 China Molybdenum Co will own Anglo American’s niobium and phosphates businesses in the Brazilian states of Goiás and São Paulo.
Specifically, CMOC bought Fosfatos Brasil Limitada and Nióbio Brasil Limitada, as well as the associated niobium sales and marketing function.
“The niobium business is an important strategic addition to CMOC’s existing molybdenum and tungsten business as it is a critical value-added input for specialised alloys and steel production. The phosphates business provides strategically important diversification benefits to the Company’s metals portfolio. The phosphates sector has attractive long-term fundamentals and positive outlook due to robust demand and supply dynamics in Brazil,” the Asian firm said in a statement.
CMOC paid approximately US$1.7 billion, constituting the agreed consideration of US$1.5 billion and approximately US$187 million of working capital and other adjustments, subject to certain post-closing adjustments.
Anglo American said that, after taxes payable and transaction costs, net proceeds of $1.5 billion from the sale will be used to reduce debt.
AAL is the world’s number five diversified mining company, but it announced a “radical portfolio restructuring” at the end of last year with the idea of holding just to the assets where it sees long-term potential.