Anglo American sells mine in Amapá

Mining company Anglo American and its partner Cliffs Natural Resources closed a deal to sell its operation iron ore extraction in Amapá to Zamin Ferrous, former trader of commodities Pramod Agarwal, for an undisclosed amount.
Anglo acquired control of the mine, in the State of Amapá in Brazil, the MMX, company of billionaire Eike Batista, in 2008, as part of the acquisition of the Minas-Rio project for $ 5.5 billion. But the mine was considered non-essential, and officially auctioned last year, in a move to restructure its asset portfolio made by mining company in the world.
The sale announced yesterday, which adds to the portfolio of Thomas iron ore assets in South America, will allow Anglo focus their activities on your most important asset, the Minas-Rio do Brazil, where the mining company faces high costs and delays in the granting of licences.
The Minas-Rio was the key factor in the cooling of relations between the British Presidency and the shareholders, and, together with the forthcoming review of the platinum mining operation, is considered crucial to the recovery of his actions, whose performance has been lower than expected.
Anglo announced in November to be unlikely that the cost of the Minas-Rio project is under $ 8 billion, compared with the previous forecast of $ 5.8 billion and who has corresponded to twice the original estimate.
"More important to Anglo's shares (of which the sale of the Amapá mine) would be that the transaction (yesterday) was followed by greater rationalization of the portfolio in its iron ore assets," JP Morgan analysts yesterday, adding that investors probably would like a strategic partner to Anglo in the Minas-Rio project.
The Amapá mine has potential for expansion, according to Zachariah, who owns the processing plant of Zamapa iron ore, in the same State, but one of the limitations of the operation is represented by the restriction on large ships in the port of the Amazon that serve the mining company, which reduces the amount of ore to be loaded on any date.
However, Zamin said the acquisition will allow it to produce 45 million tons a year within five years.
"Zamin is buying in a favorable time of the cycle in which iron ore prices are recovering after the collapse in mid-2012, and of renewed confidence in the prospects of the industry," said Agarwal, founder of Zamin.
Devaluation. An internal review carried out by Anglo in 2011estabeleceu the amount of $ 1.5 billion for the Amapá mine, meaning that 70% of Anglo would at least $ 1 billion, but it is believed that this value has dropped because the price of iron ore lowered and China's growth prospects are unclear.
A September report put the value of the deal closer to the range of $ 400 million to $ 600 million. And, yesterday, analysts said that estimated a price tag well below that amount.
In its announcement, the Cliffs said the value of the Amapá mine would need to be corrected in order to reflect their fair value, adding that it would make a net provision for depreciation of around $ 380 million to $ 420 million.
Anglo said in its annual report of 2012 that, this year, the operation in Amapá expected to produce 5.5 million tons of iron ore.