Plug pulled on Mozambique purchase

Anglo American has abandoned a $555 million (R5.1 billion) plan to buy a metallurgical coal project in Mozambique in the latest sign of prudence from major mining firms chastised by investors for excessive spending and poor acquisitions. In what is likely to be one of the last decisions taken under outgoing chief executive Cynthia Carroll, Anglo said last week that after months of talks conditions for the deal “have not been satisfied”. It gave no further details. Anglo announced its maiden move into Mozambique in July last year, trumpeting a deal that would have given it a majority stake in Minas de Revuboe, a deposit sandwiched between a Vale mine and a Rio Tinto project. It was a toehold in a region expected to become a key source of steelmaking coal. But since then the appetite for major projects has shrunk among mining firms and investors, as majors, including Anglo, took hefty hits on the value of boom-year deals. As a result, last week’s decision is unlikely to come as a major surprise to the market. It also comes two months after Rio wrote $3bn off the value of its own Mozambique asset. Anglo said last week that it still aimed to build up a position in the country’s coal region despite pulling this deal. Anglo’s share price on Thursday closed 0.89 percent lower at R239.35. – Reuters