Zamin Ferrous, a part of the privately held group promoted by UK-based businessman of Indian origin Pramod Agarwal, has completed the acquisition of Anglo American Plc’s Amapa iron ore operation in Brazil (Amapa) for an initial consideration of $134 million, as per a regulatory disclosure.
Zamin will also pay Anglo American conditional deferred consideration of up to $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.
This follows a previous announced deal in January this year when Anglo American announced the sale of its 70 per cent stake in Amapá to Zamin. However, the deal was amended following a geological event in March at the Santana port facility which resulted in the destruction of the port ship-loader infrastructure and sampling tower besides death of six people.
Anglo American entered into further discussions with its existing partner Cliffs Natural Resources and Zamin and subsequently entered into an agreement with Cliffs to acquire its 30 per cent interest in Amapá. Two months back it amended the sale agreement with Zamin to sell the entire 100 per cent of the mine.
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.
Amapa is a supplier of seaborne iron ore based in the state of Amapá in northern Brazil. It reported a loss before tax of $369 million in 2012.
London and Johannesburg stock exchanges-listed Anglo American mines, processes and refines a range of platinum group metals.
Started in 2005, Zamin Ferrous is a private international mining group which owns three assets with a combined 1,500 metric tonne potential resource in Brazil as well as the 2,500 metric tonne Valentines project in Uruguay. Zamin owns the Zamapa iron ore processing facility in Amapa, 50 per cent of the Susa iron project, Rio Grande Norte and the Greystone project, a large iron ore deposit in the south east of Bahia State.
(Edited by Joby Puthuparampil Johnson)