Anglo American has agreed to acquire and integrate the Vale-owned Serra da Serpentina high-quality iron ore resource into the former’s Minas-Rio iron complex in Brazil.
In line with this, Anglo American will continue to control, manage and operate the Minas-Rio iron operation, including any future expansions related to Serra da Serpentina.
According to the terms of the deal, Vale will provide Serra da Serpentina resources and $157.5m in cash to gain a 15% stake in the expanded Minas-Rio iron mine, subject to normal completion adjustments.
Upon the completion of the transaction, Vale will receive its pro rata share of the Minas-Rio production.
Besides, Vale will have the option to acquire a further 15% interest in the enlarged Minas-Rio iron operation for cash.
It is contingent upon future expansion milestones including the receipt of the required environmental license and completion of a pre-feasibility study (PFS) and feasibility study (FS).
Vale CEO Eduardo Bartolomeo said: “We are pleased to partner with Anglo American to support the growing demand for high-quality iron ore as our clients accelerate their transition to low carbon emissions steelmaking.
“Minas-Rio is a Tier-1 asset that will benefit from great synergies with Serpentina’s deposit and Vale’s logistics and we are confident this partnership will unlock significant value to all of our stakeholders.”
Through the combination of the two resources, both parties aim to explore considerable expansion opportunities, including the potential to double production.
The Minas-Rio complex is an integrated iron ore operation with a nameplate capacity of 26.5Mtpy of high-grade pellet feed. It has the potential to expand to up to 31Mtpy in its current configuration.
Vale`s Serra da Serpentina deposit is contiguous to the Minas-Rio complex and has resources estimated at 4.3 billion tonnes.
The expanded Minas-Rio iron operation will have the option to use Vale’s nearby rail line and Tubarão port to transport expanded output to Anglo American’s current port facility at Açu.
Anglo American CEO Duncan Wanblad said: “The opportunity to partner with Vale to secure a high-quality iron ore resource of this scale and quality, right next door to Minas-Rio, is compelling – particularly given all the physical synergies of our mining and processing infrastructure to create a single optimised operation, combined with the option to access Vale’s rail and port logistics.”
Subject to customary corporate and regulatory approvals, the transaction is anticipated to be completed in Q4 2024.
