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25 September 2013 |
Anglo American agrees revised terms for sale of Amapá to Zamin |
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On 4 January 2013 Anglo American plc ("Anglo American") announced the sale of its 70% interest in the Amapá iron ore operation in Brazil ("Amapá") to Zamin Ferrous Ltd. ("Zamin"). On 28 March 2013, prior to the completion of that transaction, a major geological event occurred at the Santana port facility which resulted in the destruction of the port shiploader infrastructure and sampling tower and the tragic loss of six lives. In light of these circumstances, Anglo American entered into further discussions with its partner Cliffs Natural Resources ("Cliffs") and Zamin. Anglo American subsequently entered into an agreement with Cliffs to acquire its 30% interest in Amapá and has now agreed to amend the sale agreement with Zamin, including to reflect Anglo American's disposal of a 100% interest in Amapá to Zamin.
Anglo American has agreed to sell 100% of Amapá to Zamin for an initial total consideration of approximately $136 million, subject to certain adjustments at completion plus the repayment of any intercompany balances. In addition, Zamin will pay Anglo American conditional deferred consideration of up to a maximum of $130 million in total, payable over a five year period and calculated on the basis of the market price for iron ore. Anglo American will use the proceeds to pay down debt.
As part of the transaction, Anglo American will assume responsibility for, and the risks and rewards of, the insurance claim in relation to the Santana port incident by acquiring the claim at full claim value. After the tragic incident at the Santana port, the successful completion of this transaction will allow a more certain future for all the stakeholders of Amapá and for Anglo American to deliver on its strategic objectives.
The transaction is expected to close by the end of the year and is subject to Amapá state regulatory approval.
For further information, please contact:
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Investors |
UK James Wyatt-Tilby Tel: +44 (0)20 7968 8759 |
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UK Leng Lau Tel: +44 (0)20 7968 8540 |
Emily Blyth Tel: +44 (0)20 7968 8481 |
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Caroline Crampton Tel: +44 (0)20 7968 2192 |
South Africa Pranill Ramchander Tel: +27 (0)11 638 2592 |
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Sarah McNally Tel: +44 (0)20 7968 8747 |
Notes to editors:
Anglo American is one of the world's largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Our portfolio of mining businesses meets our customers' changing needs and spans bulk commodities - iron ore and manganese, metallurgical coal and thermal coal; base metals and minerals - copper, nickel, niobium and phosphates; and precious metals and minerals - in which we are a global leader in both platinum and diamonds. At Anglo American, we are committed to working together with our stakeholders - our investors, our partners and our employees - to create sustainable value that makes a real difference, while upholding the highest standards of safety and responsibility across all our businesses and geographies. The company's mining operations, pipeline of growth projects and exploration activities span southern Africa, South America, Australia, North America, Asia and Europe.
www.angloamerican.com
Zamin Ferrous is a private international mining group that has been operating in Brazil since 2005 and owns three significant assets with a combined 1,500 Mt potential resource in Brazil as well as the 2,500 Mt Valentines Project in Uruguay. Zamin owns the Zamapa iron ore processing facility in Amapa state with a total of 200 employees. It also owns 50% of the Susa iron project, which is located in the state of Rio Grande Norte and the Greystone project, a large iron ore deposit in the south east of Bahia State. Shipments from Susa and Zamapa began in 2011 and on-going exploration at Greystone has proven a 284 Mt resource, with a potential resource of 700 Mt. Zamin sold its Bamin project in the State of Bahia to ENRC for total compensation of $1 billion paid in 2008 and 2010.
Amapá is a supplier of seaborne iron ore based in the state of Amapá in northern Brazil. Until the incident which destroyed the port infrastructure in March 2013, iron ore was exported through the port of Santana. In relation to the port incident, Amapá will be making a claim under its insurance policies which have a cap of R$360 million (approximately $170 million). Prior to Anglo American's agreement to acquire Cliffs' 30% interest in Amapá (which remains subject to regulatory approval) Amapá was owned 70% by Anglo American and 30% by Cliffs. Amapá reported a loss before tax in 2012 of $369 million, given the impairment of the assets taken by Anglo American on the transfer of Amapá to assets held for sale in 2012. As at 30 June 2013, Amapá had gross assets of $404 million. Amapá's mining activities are led by Director of Operations José Luiz Martins.
