Tuesday, October 19, 2021

Anglo American asset disposals in line with Portfolio rebalancing strategy

As was expected, Anglo American which owns 85 percent of De Beers announced the sale of its Niobium and Phosphates businesses in Brazil to China Molybdenum Co. Ltd (CMOC), a deal which falls closely in line with what De Beers CEO Bruce Cleaver recently described as a “perfectly natural position to take.” The remaining 15 percent of De Beers is owned by the government of Botswana. 

As indicated from the communiqu├® containing details of the sale, Anglo American received cash proceeds of $1.7 billion, which after taxes payable and transaction costs, will be used to reduce debt. The expected net proceeds from the sale that will go towards debt reduction is $1.5 billion. 

According to Anglo American, the sale follows the agreement that was announced on 28 April 2016. As at 30 September, 2016 CMOC had fully acquired the economic benefits of the businesses. The businesses are located in the states of Goiás and São Paulo, in Brazil. The Phosphates business consists of a mine, beneficiation plant, two chemical complexes and two further mineral deposits whereas the Niobium business consists of one mine and three processing facilities, two non-operating mines, two further mineral deposits and sales and marketing operations in the United Kingdom and Singapore.

“Anglo American has received cash proceeds of approximately $1.7 billion, constituting the agreed consideration of $1.5 billion and approximately $187million of working capital and other adjustments, subject to certain post-closing adjustments,” reads the announcement.  

Cleaver explained in an earlier interview that the asset disposals relating to De Beers will allow the Group to focus on long term growth options considered to be an investment into the future.  The assets which the Group wants to remain with are those regarded as high quality assets which will assure keeping market share at a good level. 

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