Anglo’s Sale of Nickel Mine Said to Stall as Bids Fall Short

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  • CEO has said before that Anglo will rebuff offers below value
  • Anglo is restructuring business to focus on copper, diamonds

Anglo American Plc’s attempt to sell a nickel mine in Brazil has stalled because bids from potential suitors are too low, according to people familiar with the situation.

Indicative bids from suitors for the Barro Alto nickel mine fell short of the valuation sought by the company, said the people, who asked not to be identified because the talks are private. Anglo hasn’t formally ended the sales process, they said. Chief Executive Officer Mark Cutifani has repeatedly insisted that the company is not running a firesale and will rebuff offers that do not meet expectations.

The nickel business had attracted interest from companies including Glencore Plc, X2 Resources and Sherritt International Corp., the people said. All three companies declined to comment. Anglo’s shares fell 3.2 percent in London today, paring this year’s surge to 186 percent, the biggest gainer on the FTSE 100 Index in 2016.

Anglo is seeking to sell the mine as part of wider restructuring of the business that will cut debt below $10 billion by the end of the year. The century-old firm plans to sell more than half its mines, exit iron ore and coal and focus on diamonds, platinum and copper.

A spokesman from Anglo declined to comment.

Anglo wants to raise more than $3 billion from asset sales this year as part of the plan to reduce debt. The company is trying to find a buyer for coal mines in Australia and South Africa, and earlier this year sold its niobium and phosphates business for $1.5 billion.

“It’s about value,” Cutifani told investors last month. “It is about having the discipline to hold and make sure we get values to the assets.”

Anglo mined 22,300 tons of nickel in the first six months of the year with sales of $187 million and underlying earnings before interest, taxes, depreciation and amortization of $24 million. The company expects to produce 45,000 tons to 47,000 tons of nickel this year.