LONDON (dpa-AFX) - Anglo American Plc (AAUKY.PK, AAL.L), a British miner, said on Thursday that it has agreed to buy and integrate the contiguous Serra da Serpentina high quality iron ore resource of the Brazilian miner, Vale SA, into its Minas-Rio mine in Brazil.
Serpentina contains a mineral resource of 4.3 billion tons of iron ore, with a significantly larger total endowment upside.
Serpentina is also of a higher iron ore grade than Minas-Rio's already high grade ore and contains predominantly softer friable ore that together are expected to translate into lower unit costs and capital requirements for its extraction.
Under the terms, Vale will contribute Serpentina and $157.5 million in cash to acquire a 15 percent shareholding in the enlarged Minas-Rio.
Post transaction, Vale will receive its pro rata share of Minas-Rio production. Vale will also have an option to acquire an additional 15 percent shareholding in the enlarged Minas-Rio for cash.
The transaction is expected to be completed in the fourth-quarter, after which, Anglo American will continue to control and manage the Minas-Rio operation.
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