Anglo American Plc., a leading global mining company, has agreed to purchase a 49 percent stake in Brazilian iron ore project MMX Mins-Rio.
As part of the company's development plan to focus on the iron ore industry, Anglo will buy the stake from Brazil's MMX Mineracao e Metalicos SA and London-based Centennial Asset Mining Fund LLC for a total of $1.15 billion.
The Rio de Janeiro-based MMX project will involve the digging of a 53 million mt-per-year mine in Minais Gerais state as well as a port to export the iron ore. Capital expenditure of US$2.35 billion will be required to complete Phase I of the Minas-Rio Project, and will be provided from debt financing and shareholders' equity. Start up is slated for the fourth quarter of 2009.
In the past year, Anglo has also acquired a 65 percent stake in South African mining company Kumba Iron Ore Ltd., which plans to double its output to 81 million metric tons by 2015, from 31 million metric tons last year.
Cynthia Carroll, CEO of Anglo American, said in a statement: "Iron ore is core to Anglo American's future growth strategy and we are pleased to have taken this important step in securing this partnership with MMX . . . This project, together with the planned Kumba expansions, will add significantly to Anglo American's iron ore production."
The Minas Gerais state is the source of approximately half the iron ore mined by Companhia Vale do Rio Doce, the world's largest iron ore producer.