Vale Sells $763 Million Stake in Moatize Coal Mine to Mitsui & Co.
Brazilian mining company Vale has agreed to sell a 15 percent stake in its Moatize coal project to Japanese trading house Mitsui & Co. The $450 million deal will also include a 50 percent stake in associated rail and port infrastructure for an additional $313 million.
Located in Mozambique, the Moatize mine is one of the largest coal deposits in the world. Since commencing production earlier this year, coal output has increased by 8.4 percent to 2.14 million tons.
“The partial sale of the troubled Moatize mine and logistics project appears to be at a very attractive price for Vale,” said Tony Robson, an analyst at BMO Capital Markets. “The proposed sale would likely make the company net free cash flow break-even for the year.”
The deal includes a 50 percent stake in the Nacala Logistics Corrdior (NLC) rail and port infrastructure. This critical piece of the acquisition will allow shipments of coal from the Port of Nacala – 912 km east of the mine -- and help increase capacity of rail and port shipments.
“The transaction is essential for the continuity of our investment in Mozambique and Malawi as it provides the funding for the completion of the Moatize project and of the NLC,” Vale said in a separate statement.
According to Reuters Africa, Vale will use the proceeds of the sale to fund the expansion of the mine. Mitsui will also be responsible for its share of future mine investments.
The deal is expected to close in 2015 in which Vale will indirectly own 81 percent of the Moatize coal mine and 35 percent of NLC.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.