LONDON, UK: Anglo American plc, a global mining company, has announced a deal with Vale SA, the world’s largest iron ore producer, to acquire and integrate a massive iron ore resource adjacent to its Minas-Rio mine in Brazil.
The deal, valued at US$157.5 million, will give Vale a 15% stake in the enlarged Minas-Rio, which will combine the existing mine with the Serra da Serpentina (“Serpentina”) resource owned by Vale. Serpentina has more than twice the orebody length and a higher grade than Minas-Rio, which is already one of the highest quality iron ore mines in the world.
The integration of the two resources is expected to lower the unit costs and capital requirements for extraction, as well as offer significant expansion opportunities, including the potential to double production. The deal also includes an option for Vale to increase its shareholding to 30% if and when certain milestones relating to a future expansion of Minas-Rio are met.
The enlarged Minas-Rio will also have the option to use Vale’s rail line and port facilities to transport its output, instead of building a second pipeline to Anglo American’s port at Açu. This will reduce the environmental and social impacts of the project, as well as the logistics costs.
The deal is subject to regulatory approvals and is expected to close in the fourth quarter of 2024.
Duncan Wanblad, Chief Executive of Anglo American, said: “The opportunity to partner with Vale to secure a high quality iron ore resource of this scale and quality, right next door to Minas-Rio, is compelling – particularly given all the physical synergies of our mining and processing infrastructure to create a single optimised operation, combined with the option to access Vale’s rail and port logistics. 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 decarbonising their own processes for decades to come. The Minas-Rio DRI-grade product sells into one of the most attractive growth segments available in our industry today.”
Eduardo Bartolomeo, CEO of Vale, commented: “We are pleased to partner with Anglo American to support the growing demand for high quality iron ore as our clients accelerate their transition to low carbon emissions steelmaking. Minas-Rio is a Tier-1 asset that will benefit from great synergies with Serpentina’s deposit and Vale’s logistics and we are confident this partnership will unlock significant value to all of our stakeholders. We plan on allocating our share of the high-quality pellet feed to our pellet plants in Brazil and in the future to the Mega Hubs producing iron ore briquettes.”