Anglo American Aquires MMX Minas-Rio Mining Complex in Brazil

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Researched by Industrial Info Resources (Sugar Land, Texas). Last April, the British company Anglo American (NASDAQ:AAUK), the world’s third largest mining company, acquired a 49% ownership interest in MMX Minas-Rio from Eike Batista, Chairman and CEO of MMX, for an economic value and effective price of $1.15 billion.

The MMX Minas-Rio Complex, owned by MMX Mining (70%) and Centennial Asset (30%), is MMX’s biggest project and is developing an integrated iron ore project which will start operating in 2009. The complex consists of a number of iron ore deposits in the State of Minas Gerais, Brazil; a 462 kilometer long slurry pipeline which goes through 32 municipalities; and the ongoing development of an iron ore terminal in Sao Joao da Barra, Rio de Janeiro, to handle capesize vessels. This undertaking will allow 8 million tons of iron ore to be exported in 2009 and the amount should reach the 26.6 million tons by 2011.

The Minas-Rio Project is under development; its first phase will start producing 26.5 million tons of iron ore per year in the fourth quarter of 2009. After the confirmation of MMX Minas-Rio’s sufficient reserves and obtainment of the permits, the project is planned to double its capacity in a second phase. An additional $600 million would be paid in the same manner as in the first phase to increase Anglo American’s participation in MMX Minas Rio to up to 50%.

The association between Anglo American and MMX will combine the Brazilian company’s skills with Anglo American's globally renowned developing capabilities at a time when long term prospects for the iron ore industry are extremely positive.

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