[Ferro-Alloys.com]Anglo American Plc, the London-based mining giant, agreed to sell its niobium and phosphate businesses to China Molybdenum Co. for $1.5 billion in cash in its first big disposal since outlining its dramatic turnaround plan in February.

 

The deal is conditional upon regulatory approval from China, but Anglo said it had commitments from holders of 63% of the Chinese group's shares to support the transaction, expected to close in the second half of this year.

 

"The proceeds from this transaction, together with the ongoing productivity and cost improvements we are driving through the business, will enable us to continue to reduce our net debt towards our targeted level of less than $10 billion at the end of 2016", CEO Mark Cutifani said in a statement.

 

The unit that mines niobium, a metal used to make specialty steel products, operates one mine and three processing facilities. Like most miners, the company is struggling with a slump in demand from China, which in turn has led to a slump in prices for raw materials.

 

While Japanese firms have directly acquired Brazilian soybean producing companies, China has bought stakes in global firms involved in fertiliser and other sectors that indirectly boost production.

 

"The price achieved is above expectations", said Paul Gait, an analyst at Sanford C Bernstein.

 

Last February Anglo American announced a new strategy to deal with the fall in commodity prices, which involves the concentration of activities in the De Beers diamond business and on platinum and copper mining operations, in order to break away from lower value commodities.

 

Anglo is targeting divestments of $3-4 billion this year alone, having already sold some smaller Australian coal assets. It's also in the process of selling its nickel business in Brazil and coal mines in Australia and South Africa.

 

Located in Goiás and São Paulo, the phosphates and niobium businesses generated $146 million cash profit in the year to 31 December, with pre-tax profit of $69 million. Its shares are now down 37pc compared to this time past year.

 

It produced 2,934 metric tons of niobium in the first half of 2015.

China urges more communication with US on steel issue

 

on Tuesday, under Section 337 of the Tariff Act of 1930, against around 40 Chinese steel producers and their distributors.Pittsburgh-based US Steel said in a statement that its complaint regarded "alleged illegal unfair competition methods and seeks the exclusion of all unfairly traded Chinese steel products from the US market."The ITC has up to 30 days to decide whether it will initiate the case.The MOC official said he hoped the ITC would overrule the charges as the provision cited by US Steel had mostly been used in intellectual property rights (IPR) dispute cases."Steel products are relatively mature and there are no IPR disputes regarding them. Charges of IPR infringement are groundless," the official said.The steel industries in the United States and China should strengthen dialogue and communication to jointly address the overcapacity, which is a result of anemic global economic recovery and tepid demand, the official added.

 

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