Brazil-based mining company MMX Mineracão e Metálicos S.A.(MMX) has announced the signing of an agreement with the shareholders of the country's Minas Gerais state-based iron ore producer Minerminas Mineradora Minas Gerais Ltda. (Minerminas) for the acquisition of 100 percent of the issued and outstanding shares of the latter company through MMX's direct subsidiary AVX Mineracão Ltda. (AVX).
Upon the fulfillment of customary conditions, the acquisition in question is expected to take place in the first quarter of 2008. The total value of the transaction is $125 million.
Minerminas operates an iron ore mine adjacent to the operations of AVG Mineracão S.A. (AVG), an indirect subsidiary of MMX, and also owns other mining rights and leases in the Serra Azul region, in Minas Gerais.
In a statement on the issue, MMX said that Minerminas produced approximately 700,000 mt of iron ore in 2007 and that MMX will merge the operations of AVG with those of Minerminas in order to provide higher efficiency.
MMX expects that the integrated operations of AVG and Minerminas will produce 6.1 million mt of iron ore in 2008, which can be increased to eight million mt later on through the engineering studies to be carried out. To this end, MMX is considering investing $8.1 million.