| Thu 17 Jan 2008, 15:49 | | AGL - Anglo American Enters Into Exclusive Discussions To Acquire |
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AGL
ANAAL
AGL - Anglo American Enters Into Exclusive Discussions To Acquire
Control Of The MMX Minas-Rio And MMX Amapa Iron Ore Projects
Anglo American plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
Share code: AGL
ISIN number: GB00B1XZS820
("Anglo American plc" or "the company")
News Release
17 January 2008
Anglo American enters into exclusive discussions to acquire control of
the MMX Minas-Rio and MMX Amapa iron ore projects
Anglo American plc ("Anglo American") is pleased to announce that it
has entered into a period of exclusive discussions with the controlling
shareholder of MMX Minera?ao e Metalicos S.A. ("MMX"), Mr Eike Batista
("Mr Batista"), in relation to the acquisition of Mr Batista`s 63.6%
shareholding in a new company ("Newco") which will be demerged from MMX
and will own MMX`s current 51% interest in the Minas-Rio iron ore
project and 70% interest in the Amapa iron ore project. MMX`s
logistics business, LLX Logistica S.A., will also be demerged from MMX
as part of the same reorganisation, but will not be included in the
transaction with Anglo American.
Under the proposed transaction, Anglo American will pay approximately
US$5.5 billion for 100% of the issued and outstanding shares of Newco,
or approximately US$361.12 per Newco share (assuming one Newco share
for each current MMX share), as well as royalty payments to MMX
beginning in 2025 for the Minas-Rio project and 2023 for the Amapa
project.
The transaction is subject to a number of terms and conditions,
including the negotiation of the transaction documents, customary
regulatory approvals and completion of the reorganisation of MMX.
Anglo American has committed, after completion of this transaction, to
extend an offer to the minority shareholders of Newco at the same price
per share offered to Mr Batista, the successful completion of which
would result in Anglo American owning 100% of the Minas-Rio project,
70% of the Amapa project and 49% of LLX Minas-Rio, the owner of the
Port of A?u. Anglo American acquired 49% of the Minas-Rio project as
part of its original investment announced in April 2007, which included
49% of LLX Minas-Rio.
Cynthia Carroll, CEO of Anglo American, said: "I am delighted that Mr
Batista has agreed to Anglo American`s proposed price for his shares in
Newco and that we are now in exclusive talks to acquire the Minas-Rio
and Amapa iron ore projects. These two projects are a great strategic
fit for Anglo American and, together with the planned Kumba expansions,
will significantly increase our participation in the seaborne iron ore
market to approximately 150Mtpa by 2017. Our experience of working on
the Minas-Rio project since last year has been excellent and we are
pleased to be developing such an exciting iron ore project in Brazil.
Anglo American will continue to evaluate the substantial expansion
potential of these projects, particularly given the extremely positive
long term prospects for the iron ore industry."
Eike Batista, Chairman & CEO of MMX said: "I strongly welcome Anglo
American`s globally renowned capabilities in developing and operating
assets of this size and I look forward to a productive ongoing
relationship as Chairman of the project boards of the Minas-Rio and
Amapa projects as they reach their full potential. Our experience of
working with Anglo American has reinforced my view that Anglo
American`s world class expertise and its approach to environmental and
social responsibility issues positions it well to own and operate these
important assets in Brazil."
A further announcement will be made in due course.
For further information, please contact:
United Kingdom
James Wyatt-Tilby, Media Relations
Tel: +44 (0)20 7968 8759
Anna Poulter, Investor Relations
Tel: +44 (0)20 7968 2155
South Africa
Pranill Ramchander, Media Relations
Tel: +27 (0)11 638 2592
Notes to editors:
Anglo American plc is one of the world`s largest mining and natural
resource groups. With its subsidiaries, joint ventures and associates,
it is a global leader in platinum group metals and diamonds, with
significant interests in coal, base and ferrous metals, as well as an
industrial minerals business and a stake in AngloGold Ashanti. The
Group is geographically diverse, with operations in Africa, Europe,
South and North America, Australia and Asia. (www.angloamerican.co.uk)
MMX Minera?ao e Metalicos S.A. consists of integrated mining, mineral
processing, production and logistics operations for iron ore and
intermediate products for the steel industry. Principal projects
include, MMX Corumba System, MMX Amapa System, MMX Minas-Rio System and
LLX Logistica. (www.mmx.com.br)
The Minas-Rio iron ore project is located in the Minas Gerais state in
Brazil. It will comprise a mine and beneficiation plant producing high-
grade pellet feed. The pellet feed will be transported through a
slurry pipeline to the Port of A?u which is being constructed in Rio de
Janeiro State, with the potential for further pipelines and rail
access. The project is due to begin production in H1 2010 with
potential production of 26.5 million tonnes per annum from the first
pipeline. MMX currently owns 51% of the Minas-Rio project and Anglo
American acquired a 49% stake in the project in May 2007, including a
49% stake in LLX Minas-Rio, the owner of the Port of Acu.
The Amapa iron ore project is located in the Amapa state in Northern
Brazil. Construction of the Amapa project was completed recently, with
initial production in December 2007 and with annual capacity of 6.5
million tons per annum of iron ore. MMX currently owns 70% of the Amapa
project and Cleveland Cliffs Inc. owns 30%.
The resource statement for both the Minas-Rio and Amapa iron ore
projects is being updated in Q1 2008.
Summary transaction structure
It is envisaged that, subject to Anglo American and Mr Batista entering
into definitive agreements:
- MMX will be divided into three separate companies: the first being
Newco; the second LLX Logistica S.A.; and the third, MMX, consisting of
the balance of MMX`s assets and liabilities;
- Anglo American will acquire Mr Batista`s shares in Newco and,
after completion of this transaction, will extend an offer to the
minority shareholders of Newco at the same price per share offered to
Mr Batista;
- In addition to the US$5.5 billion price agreed for 100% of the
issued and outstanding shares of Newco, Anglo American has agreed that
Newco will pay royalty payments to MMX beginning in 2025 for the Minas-
Rio project and 2023 for the Amapa project;
- Anglo American already owns 49% of the Minas-Rio project and 49%
of LLX Minas-Rio, the owner of the Port of A?u. Newco will own the
remaining 51% of the Minas-Rio project and 70% of the Amapa project;
- The successful completion of this transaction and the offer to
Newco`s minority shareholders, will result in Anglo American owning
100% of the Minas-Rio project, 70% of the Amapa project and 49% of LLX
Minas-Rio, the owner of the Port of A?u;
- LLX Logistica S.A. will include the 51% stake in LLX Minas-Rio;
The third company, MMX, will consist of the balance of MMX`s assets and
liabilities.
Date: 17/01/2008 15:49:02 Produced by the JSE SENS Department.
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