Glencore, Pramod Agarwal in race for Anglo American's Amapa iron ore mine: report
03 Nov 2012
At least four bidders, including commodities giant Glencore International and Zamin Ferrous, run by Indian commodities investor Pramod Agarwal are in the race to buy Anglo American's majority stake in the Amapa iron ore operation in northern Brazil, Reuters reported yesterday, citing sources familiar with the matter.
Other bidders in the second phase of the auction include Russian steelmaker Severstal and Australia's Centaurus Metals Ltd.
London-based Anglo American had acquired both the Amapa operation and Minas Rio in 2008 from Brazilian billionaire Eike Batista's MMX for $5.5 billion. But the company is seeking to hive off Amapa and focus on its much delayed Minas Rio - one of the world's largest mining projects, and initially expected to export 26.5 million tonnes of iron ore in 2013.
Anglo American holds a 70 per cent stake in Amapa, while the remaining 30 per cent is held by Cleveland, Ohio-based Cliffs Natural Resources.
The Amapá mine started commercial production in January 2010. Anglo American had last month said that it might raise output in Amapa to 6.5 million tonnes a year, up about 30 per cent from last year's output of almost 5 million tonnes.
It has an iron ore offtake agreement with ASX-listed Beadell Resources.
The report said Anglo American's internal assessment last year had valued Amapa at $1.5 billion, which shows that its 70 per cent holding would be worth at least $1 billion. But the sale may not get that price since global iron ore prices have plunged since its assessment.
Jersey-based Zamin has a strong portfolio of iron ore projects in Latin America and is a supplier of direct reduction and blast furnace iron ore pellet fines to the global steel industry.
Founded in 2005 by UK based billionaire Pramod Agarwal, Zamin has four production, development and exploration assets, Valentines in Uruguay, Greystone, Zamapa and Susa in Brazil. In 2010, it sold its 50 per cent stake in the Bamin iron ore project in Bahia, Brazil to its joint venture partner ENRC of Kazakhstan http://en.wikipedia.org/wiki/Kazakhstan for $735 million.