Global mining giants Brazilian-based Vale and Anglo-Australian Rio Tinto have announced their receipt of approval from the Brazilian National Defense Council (Conselho de Defesa Nacional - CDN) for Rio Tinto's proposed sale of its Corumbá iron ore mining operations, located in the state of Mato Grosso do Sul, Brazil.
The acquisition is expected to close shortly. The conclusion of the acquisition is still subject to certain conditions, which shall be fulfilled by the acquirer, Vale, and the seller, Rio Tinto Plc and other entities controlled by Rio Tinto.
As SteelOrbis previously reported, on January 30, 2009 Rio Tinto reached an agreement with Vale to sell its Corumbá iron ore mine and the associated river logistics operations in Paraguay, the Potasio Rio Colorado potash project in Argentina and the Regina exploration assets in Canada for US$1.6 billion through an all-cash transaction. The potash transaction, closed on February 5, 2009 for a cash consideration of US$850 million, has already been concluded, while the Corumbá portion - the mining operation and associated logistics assets, including port and barges - of the sale is valued at US$750 million.
Corumbá produced 2.0 million mt of iron ore in 2008. The logistics assets enable Corumbá to be 70 percent self-sufficient in the transportation of iron ore down the Paraguay River.
Over the last 18 months, Rio Tinto has announced asset sales of US$6.6 billion including the Corumbá and potash transaction as it seeks to reduce its debt.