Mining giant Anglo American (LSE: AAL.L - news) has agreed to sell its 70pc stake in the Amapa iron ore mine in Brazil to Zamin Ferrous, bringing the total raised from its disposal programme since 2009 to more than $5bn (£3.1bn).
The sale price was not disclosed but it is expected to be significantly below the purchase price of $1.9bn.
Anglo bought control of Amapa from MMX in 2008, as part of the company’s purchase of the $5.5bn Minas Rio project. However, the stake was put up for sale last year after management deemed it “non-core”.
The sale will allow Anglo to focus on the flagship Minas Rio mine, where costs have overrun substantially. Anglo’s forecast of the project’s cost has been increased four times, with the last increase leading to the resignation of Cynthia Carroll, Anglo’s chief executive. Her replacement is yet to be announced.
“This is a minor transaction but pleasing that Anglo is progressively executing on the sale of non-core assets,” said Nomura. “Anglo will likely take some form of non-cash impairment charge against the asset.”
US group Cliff Natural Resources said it was selling its 30pc stake in Amapa to Zamin, noting in a US regulatory filing that the deal would generate a $380m to $420m impairment charge.
Des Kilalea, a mining analyst at RBC Capital Markets, said this charge implied the sale price could be as low as $330m. He expects a further impairment in Anglo’s books but the miner has already written down $1.5bn of value of the asset. Anglo American shares fell 18p to £19.96.