In an effort to focus on its core commodity businesses, U.K.-based miner Anglo American Plc (AAL.L) Monday said it has agreed to sell its Moly-Cop and AltaSteel businesses to Australia's OneSteel Limited (OST.AX,OSTLF.PK, OSTLY.PK) for a total consideration of $932 million on a debt and cash free basis.
Santiago, Chile-based Moly-Cop is a manufacturer of grinding media, with facilities in Chile, Peru, Mexico and Canada. These facilities convert steel bars supplied by companies including AltaSteel into grinding balls for use in mine milling circuits.
AltaSteel, based in Edmonton, Canada, is a vertically-integrated steel mini-mill. It is supplied with scrap steel by Maple Leaf Metals and GenAlta Recycling Inc. AltaSteel's products are ballstock, heat-treated grinding rods for use in rod mills and reinforcing bars.
The business being sold includes the joint venture interests in the Donhad grinding media business in Australia and GenAlta in Canada. The Business was previously managed as part of the wider Scaw Metals Group.
The units generated $319 million in the first half of 2010 and had revenue of $642 million in fiscal 2009.
OneSteel is a manufacturer and distributor of steel and finished steel products with revenues in excess of A$6 billion.
As per the agreement, economic interest in the Business passes to OneSteel with effect from July 1. Completion of the transaction is conditional on antitrust clearance in Canada and will undergo regulatory review in Australia and Brazil.
Commenting on the decision, Cynthia Carroll, Chief Executive of Anglo American, said: "Following the $1.3 billion divestment of our Zinc portfolio in May 2010, the sale of Moly-Cop and AltaSteel represents further strategic progress as we continue to focus on our core commodity businesses and on the delivery of our major near term growth projects."
Anglo American said it would continue to progress its divestment program announced last year, which includes the sale of the Scaw Metals Group based in South Africa.
Geoff Plummer, CEO of OneSteel, said: "This is a significant milestone for the company and positions OneSteel as a global player in grinding media with participation in the world's largest and most attractive mining consumables markets, as well as providing OneSteel with a great platform for future growth in mining consumables."
AAL.L closed Friday's regular trade at 3,012 pence, down 43 pence from the previous close, on 6.81 million shares.
After moving in a range of A$2.70-A$2.83, OST.AX closed unchanged at A$2.74 on 17.15 million shares.
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