Sale of Zinc portfolio

RNS Number : 5902L

Anglo American PLC

10 May 2010

 



News Release

10 May 2010

Anglo American announces sale of Zinc portfolio to Vedanta for $1,338 million

Anglo American plc ("Anglo American") announces that it has agreed to sell its portfolio of zinc assets ("Anglo American Zinc") to Vedanta Resources plc ("Vedanta") for a total consideration of $1,338 million on an attributable, debt and cash free basis.

Anglo American Zinc comprises the Skorpion mine in Namibia, the Lisheen mine in Ireland and a 74% interest in Black Mountain Mining in South Africa, which holds 100% of the Black Mountain mine and the Gamsberg project. Of the total consideration, $698 million relates to the Skorpion mine, $308 million relates to the Lisheen mine and $332 million relates to Anglo American's 74% interest in Black Mountain Mining.

The sale of Anglo American Zinc follows Anglo American's October 2009 announcement of its strategy to focus on its portfolio of world class, large scale, long life mining assets in those commodities where Anglo American holds advantaged positions.

Cynthia Carroll, Chief Executive of Anglo American, said: "The successful sale of Anglo American Zinc for $1,338 million following our announcement in October last year is testament to the high quality of the business and its management team. This agreement represents an important milestone in our strategy to focus on our core commodity businesses and on the delivery of our exciting near term growth from our $17 billion of approved projects. I am grateful for the support received from Anglo American Zinc's management and employees and I believe they will benefit under the ownership, and with the development plans, of Vedanta."

Anil Agarwal, Chairman of Vedanta, said: "We are delighted to have reached this agreement with Anglo American to acquire their portfolio of zinc assets.  These high quality assets complement Vedanta's existing portfolio, creating the largest zinc and lead producer in the world.  We intend to rapidly develop Gamsberg, one of the largest high quality zinc projects in the world, leveraging our world-class large project development expertise. Vedanta has consistently demonstrated a track record of successfully integrating and investing in its acquisitions, and we look forward to working with the high quality management team and employees of Anglo American Zinc, Exxaro and the local communities towards growing the business. We are committed, as we are throughout all of our operations world wide, to maintaining the highest health and safety standards, and to the sustainable development of these operations."

The transaction is subject to customary regulatory approvals as well as competition clearance in the relevant jurisdictions.  In addition, Exxaro Resources Limited ("Exxaro"), Anglo American's black economic empowerment partner in Black Mountain Mining, holds a 26% interest in the company and has a pre-emptive right to match Vedanta's offer in respect of this asset. Completion of the transaction is expected to be in stages, with separate completion dates for Skorpion, Lisheen and Black Mountain Mining.

For further information, please contact:

United Kingdom

James Wyatt-Tilby, Media Relations

Tel: [phone]

Caroline Metcalfe, Investor Relations

Tel: [phone]

Leisha Wemyss, Investor Relations

Tel : [phone]

South Africa

Pranill Ramchander, Media Relations

Tel: [phone]

Notes to Editors:

Anglo American Zinc produced 350,000 tonnes of contained zinc in 2009, generating gross revenues of $717 million and EBITDA of $227 million. The business has, in aggregate at its operating mines, Ore Reserves of 1.9 Mt of contained zinc and Mineral Resources of 1.1 Mt of contained zinc (in addition to Ore Reserves). In addition, the Gamsberg project has Mineral Resources of 12.9 Mt of contained zinc.

All figures presented on a 100% basis		Copper	Lead	Zinc
2009 Production in ktpa	Black Mountain	2	49	28
	Lisheen	0	19	172
	Skorpion	0	0	150
	Total	2	68	350
		2008	2009
Revenue in US$m	Black Mountain	152	180
	Lisheen	285	301
	Skorpion	279	236
	Total	716	717
		2008	2009
EBITDA in US$m	Black Mountain	32	55
	Lisheen	39	72
	Skorpion	132	100
	Total	203	227

The consideration agreed with Vedanta is based on effective economic ownership, including profits and cash flows, passing to Vedanta as of 1 January 2010.

Anglo American plc is one of the world's largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Its portfolio of mining businesses spans precious metals and minerals - in which it is a global leader in both platinum and diamonds; base metals - copper and nickel; and bulk commodities - iron ore, metallurgical coal and thermal coal. Anglo American is committed to the highest standards of safety and responsibility across all its businesses and geographies and to making a sustainable difference in the development of the communities around its operations. The company's mining operations and extensive pipeline of growth projects are located in southern Africa, South America, Australia, North America and Asia. 

www.angloamerican.co.uk

Vedanta Resources Plc is a London listed FTSE 100 diversified metals and mining company. The group produces aluminium, copper, zinc, lead, iron ore and commercial energy. Vedanta has operations in India, Zambia and Australia and a strong organic growth pipeline of projects. With 30,000 employees globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth.

www.vedantaresources.com

 

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