Rinehart’s Hancock weighs $3.3 billion iron ore mine project
Hancock acquired a 51% interest in the Mt Bevan project from Legacy Iron Ore Ltd. and Hawthorn Resources.
Anglo American (LON: AAL) and Vale (NYSE: VALE) have signed an agreement to integrate the Serra da Serpentina deposit, owned by the Brazilian company, into the Minas-Rio iron ore complex, controlled by the British miner.
The partnership entails Vale providing resources and making a financial contribution in exchange for participation in the operation in Minas Gerais, which will continue to be controlled by Anglo.
“The sheer scale and quality of the Serpentina orebody offers significant value, including through the scope to expand the production of the premium grade pellet feed products we sell to steelmaking customers as they focus on decarbonizing their own processes for decades to come,” Anglo American CEO Duncan Wanblad said in a statement.
Serpentina contains a mineral resource of 4.3 billion tonnes of iron ore. Vale will contribute Serpentina and $157.5 million in cash to acquire a 15% shareholding in the enlarged Minas-Rio, subject to completion adjustments. If the average benchmark iron ore price remains above $100/t or below $80/t for four years, a purchase price adjustment payment will be made to Anglo American or Vale, respectively, in line with an agreed formula.
Following completion of the transaction, Vale will receive its pro rata share of Minas-Rio production.
The enlarged Minas-Rio will have the option to utilise Vale’s nearby rail line and Tubarão port to transport expanded output as an alternative to the construction of a second pipeline to Anglo American’s current port facility at Açu.
Anglo American reported a steep fall in profit on Thursday and lowered its dividend after a slump in key commodities it produces.
Diamonds and platinum group metals — commodities unique to its portfolio — have plunged this year. The company was also forced to drastically slash its copper production goals, which sent its shares tumbling late last year.
Anglo reported a more than 30% fall in underlying earnings to $9.96 billion while cutting its final dividend by 45% from the same period in 2022.
Shares of Anglo American were up 3.1% by 11:10 p.m. EDT. The company has a market capitalization of $30.2 billion.
Vale shares were up 1%. The Brazilian miner has a market capitalization of $61 billion.
Read More: Vale says its Sossego copper mine operating license has been suspended
(With files from Reuters)
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