Anglo American share price rallies as group sells niobium and phosphates businesses

Anglo American (LON:AAL) has inked a $1.5-billion deal to sell its niobium and phosphates business in Brazil to China Molybdenum, the blue-chip miner has said. The move marks another step in the group’s strategy to offload non-core assets as it battles with the ongoing commodities rout.

Anglo American’s share price has surged in today’s trading, having added 1.87 percent to 709.90p as of 09:34 BST, outperforming the benchmark FTSE 100 index which has fallen deep into the red and currently stands 1.34 percent lower at 6,235.09 points.

The miner’s shares have lost nearly 37 percent of their value over the past year, but are up more than 136 percent in 2016.

Anglo American announced in a statement this morning that it had reached a deal with China Molybdenum to sell its Niobium and Phosphates businesses for a total cash consideration of $1.5 billion, payable to the blue-chip miner at closing.

Anglo American’s chief executive Mark Cutifani said in the statement, adding that the proceeds from the transaction would enable the group to reduce its net debt toward its target of less than $10 billion at the end of the year.

Anglo American, which has struggled alongside peers with the commodities slump, earlier this year unveiled plans to focus on its diamonds, platinum and copper assets. Bulk commodities and other minerals assets meanwhile have been earmarked for sale.

Today’s disposal comes after Reuters reported earlier this month that private equity firm Apollo and mining giant Vale had teamed up to bid for the assets.

As of 10:04 BST, Thursday, 28 April, Anglo American plc share price is 701.30p.