Bidding Wars: South32 joins race for Anglo’s $1bn Brazil ops
By David Stringer
(Bloomberg) — South32 Ltd. would be willing to acquire Anglo American Plc's stake in their manganese joint venture, the world's biggest producer, if the price was right.
Anglo is seeking to raise about $4 billion from selling mines as it races to trim its $12.9 billion of debt amid cratering prices of raw materials and focuses its portfolio on a smaller number of assets producing diamonds, platinum and copper. The London-based producer is exiting commodities tied to steel and heavy industry, including iron ore to coal.
"We know the assets well and collectively we think they are the best in the industry, today we operate and market 100 percent of the product so we know their true value," South32 said Thursday in an e-mailed statement. "As a JV partner with a deep understanding of their value, we would be a buyer if the price is right."
Manganese assets held jointly by South32 and Anglo include mines and smelters in South Africa, the GEMCO mining operations at Groote Eylandt in Australia's Northern Territory and the TEMCO alloy plant in Tasmania. South32 is the operator and has a 60 percent stake in the Samancor JV, with Anglo holding 40 percent, according to the Perth-based company.
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A restructuring of South32's manganese unit in South Africa announced this month will reduce costs, cut production and about 620 staff in response to a plunge in prices and help the business boost its ability to generate cash, Chief Executive Officer Graham Kerr said in a Feb. 4 statement. The company sees sustaining capital expenditure falling as much as 80 percent to $7 million in fiscal 2017, it said.
South32 is considering bidding for Anglo's $1 billion niobium and phosphate business in Brazil, three people familiar with the situation said in January. The sale process may be completed in the next two to three months, Anglo's Chief Executive Officer Mark Cutifani told Bloomberg Television on Tuesday. South32 previously declined to comment.