Anglo in $1bn sale of foreign steel assets

Elizabeth Fournier
ANGLO American has sold its Moly-Cop and AltaSteel businesses to Australian steel manufacturer OneSteel for $1,076bn (£641m), in the latest move to streamline the mining company’s business and renew its focus on core commodity assets.

The sale was initially priced at $932m on a debt and cash-free basis on 14 November 2010, but the final figure has been adjusted to include cash, debt, and certain other adjustments.

Moly-Cop, based in Santiago, Chile, manufactures grinding metal and owns facilities across Latin America as well as in Canada. AltaSteel is one of its steel bar suppliers – a mini-mill based in Edmonton, Canada. Control of the companies will pass to OneSteel on 1 July, though approval for the deal is still subject to Canadian antitrust clearance and regulatory review in both Australia and Brazil.

The sale also includes joint venture interests in the Donhad grinding media business in Australia, and in GenAlta Recycling in Edmonton, Canada.

Anglo announced a programme of intended divestments in October 2009, which comprised a portfolio of non-core assets including the Scaw Metals Group, of which Moly-Cop and AltaSteel are a part.

The majority of the assets planned for disposal have since been sold, though certain UK, South African and Latin American assets are still up for grabs. This latest transaction follows the sale of Anglo’s zinc portfolio for £1.3m in May last year.

A spokesman from Anglo said that though the rump of the non-core assets had been sold, disposals of its Tarmac UK assets, Scaw South Africa, and phosphate miners Copebrás and Catalão were still in the pipeline.

The spokesman said that though plans to sell the remaining assets were underway, timing on the potential deals was yet to be confirmed.

Anglo American’s South African shares gained 3.31 per cent on the news, boosting the Johannesburg Stock Exchange Top 40 by 0.39 per cent to close at R28,933.58.

The company’s stock on the LSE closed 2.14 per cent up at 3,407p, having surged to 3,468.5p earlier.