Itochu, Mitsui Said to Vie for Anglo Manganese Venture Stake

Japanese trading houses Itochu Corp. and Mitsui & Co. separately bid for a stake in Anglo American Plc’s manganese assets in Australia and South Africa as the miner shrinks its business to weather the commodity-price rout, according to people with knowledge of the matter.

Anglo is considering the offers for its 40 percent holding in a manganese joint venture with South32 Ltd., the people said, asking not to be identified as the information is private. Perth-based South32 has an option to purchase the stake, which may fetch as much as $700 million, and may decide to pre-empt an agreement with another party, one of the people said.

Anglo is seeking to raise about $4 billion from selling mines, including those that produce iron ore and coal, to cut debt after commodity prices tumbled. The London-based company, which is focusing on assets that produce diamonds, platinum and copper, this week agreed to sell its Brazil niobium and phosphate businesses to China Molybdenum Co. for $1.5 billion in cash.

Spokesmen for Anglo, Itochu, Mitsui and South32 declined to comment. South32, which was spun off from BHP Billiton Ltd. last year, said in February it would be willing to acquire Anglo’s stake in their manganese joint venture, if the price was right.

South32 owns 60 percent of the manganese joint venture, known as Samancor, and is the operator. The business, which is the world’s biggest producer of the material used in steel production, holds mines and smelters in South Africa, as well as the GEMCO mining operations at Groote Eylandt in Australia’s Northern Territory and the TEMCO alloy plant in Tasmania. 

A restructuring of the manganese operations in South Africa announced in February will reduce costs, cut production and about 620 staff in response to a plunge in prices last year and help the business boost its ability to generate cash, South32 Chief Executive Officer Graham Kerr said in a Feb. 4 statement.

Anglo, which is also selling metallurgical coal mines in Australia and a nickel business in Brazil, last year agreed to sell two copper mines in Chile to a group of investors led by Audley Capital Advisors LLP for $300 million in cash upfront.

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