Vale, Apollo Global to jointly bid for Anglo American's Brazilian niobium and phosphates assets

13 Apr 2016


Brazilian mining giant Vale is teaming up with US private equity firm Apollo Global Management to bid for Anglo American's niobium and phosphates business in Brazil worth around $1 billion, Reuters yesterday reported, citing three sources familiar with the matter.

Anglo American had earlier said that it wants to divest assets worth around $4 billion in order to cut net debt to under $10 billion by the end of the year.

Last week it agreed to sell its 70-per cent stake in the Foxleigh metallurgical coal mine in Queensland, Australia to a consortium led by Taurus Fund Management.

Anglo American did not disclose the financial terms of the deal, but it had acquired the stake in 2007 for $620 million.

The miner has been selling off its coal and other assets in order to focus on copper, platinum and diamonds.

Anglo America, which is said to be planning a complete exit from Brazil, had asked for first-round bids for its niobium and phosphates assets in Brazil by 15 February.

Its niobium assets are used in high-temperature alloys for jet engines and lightweight steel for cars. It produced 2,934 metric tons of niobium in the first half of 2015.

The niobium assets contributed $35 million to earnings before interest, taxes, depreciation and amortization, while the phosphates business had output of 513,000 tons with Ebitda of $52 million.

Vale is the biggest producer of phosphate in Brazil, and could extract synergies due to the proximity of Anglo's assets to its own, the report said.

Other interested bidders could be the Mosaic Company, the world's largest phosphate and potash supplier and BHP Billiton.

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