Anglo Said to Weigh $1 Billion Niobium, Phosphate-Unit Sale

  • Company hasn't begun formal process, may still keep business
  • Anglo American already sold tarmac, copper assets this year

Anglo American Plc is considering selling its niobium and phosphate business in Brazil in a deal that may fetch about $1 billion for the London-listed miner, said people familiar with the matter.

Anglo is working with advisers on a possible sale of the business, said the people, who asked not to be identified because the information is private. A formal sale process hasn’t started and the company may still keep the operations, according to the people. Anglo has received expressions of interest but no formal offer, one person said.

The mining company is seeking to raise $3 billion by selling assets and is cutting jobs to trim costs and cut debt amid a collapse in commodity prices. It has already raised about $2 billion this year by offloading its tarmac business, two copper mines in Chile and platinum assets in South Africa. Anglo said in July that it had net debt of $11.9 billion, with a long-term borrowing target of $10 billion to $12 billion.

Anglo closed 2.2 percent higher at 609.9 pence in London. The stock is down 49 percent this year. A spokesman for the producer declined to comment.

China’s slowdown and cooling demand for metals and minerals has undermined Chief Executive Officer Mark Cutifani’s efforts to turn around the fortunes of a business that mines platinum and diamonds in Africa and iron ore in Brazil.

Anglo says it’s among the world’s three biggest producers of niobium. Its business for that material, used to make steel, produced 2,934 metric tons in the first half and contributed $35 million to earnings before interest, taxes, depreciation and amortization. Its phosphates unit had output of 513,000 tons with Ebitda of $52 million.

In late 2013, Anglo combined the management of its nickel, niobium and phosphates operations under a sole division, naming Ruben Fernandes as CEO of the business and relocating its offices to Belo Horizonte, in the Brazilian southeastern state of Minas Gerais, from Sao Paulo.

The London-based mining company is set to become the world’s second-largest producer of niobium, used in high-temperature alloys for jet engines and in lightweight steel for cars, when it completes the ramp up of its $325 million Boa Vista Fresh Rock plant in Brazil’s Goias state by mid-2016.

Cia. Brasileira de Metalurgia & Mineracao, controlled by the billionaire Moreira Salles family, dominates the supply of niobium after starting operations in 1961. CBMM, as the Araxa, Brazil-based company is known, sold a 30 percent stake to a group of Asian steelmakers in two transactions worth $3.9 billion in 2011.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE