Johannesburg - Anglo American, the global diversified mining company, is steps away from beefing up its balance sheet after a $1.7 billion (R23.3bn) injection following the sale of its niobium and phosphates businesses in Brazil to a Chinese company.
The company said yesterday that it had received the cash injection following the agreement announced in April.
It said the economic benefits of the businesses would be transferred to China Molybdenum.
“Anglo American has received cash proceeds of approximately $1.7bn, constituting the agreed consideration of $1.5bn and approximately $187 million of working capital and other adjustments, subject to certain post-closing adjustments,” the company said.
The mining firm said net proceeds after taxes payable and transaction costs of $1.5bn from the sale would be used to reduce debt.
Anglo American net debt at the end of June declined to $11.7bn from $12.9bn at the end of December.
The company announced previously that it had managed to cut debt through cost discipline and working capital and capital expenditure reductions including proceeds of disposals.
The asset sale is against the backdrop of a major shake-up of Anglo’s portfolio after grappling with the commodity price slide and high debt levels in tandem with its peers.
Earlier this year the company said it would shed non-core assets and exit its coal business and iron ore assets so that it could focus on diamonds, platinum and copper.
The niobium and phosphates businesses are located in the states of Goiás and Sao Paulo, in Brazil.
The phosphates business consists of a mine, beneficiation plant, two chemical complexes and two further mineral deposits. The niobium business consists of one mine and three processing facilities, two non-operating mines, two further mineral deposits and sales and marketing operations in the UK and Singapore.
Anglo American shares rose 1.3 percent on the JSE yesterday to close at R173.64.
BUSINESS REPORT