Anglo-American, the FTSE 100 mining giant, is to spend over half a billion dollars on a coal project in Mozambique.
Its purchase of a 58.9% stake in the Revubo metallurgical coal operation will cost a total of $555m, the seller is the Talbot Estate.
The Revubo project is a joint venture partnership and includes Nippon Steel Corporation (33.3% interest), and Korean outfit POSCO (7.8% interest).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It has a reported resource of 1.4bn tonnes of hard coking and thermal coal suitable for open cut mining, with the potential to support the export of six to nine million tonnes per annum.
Cynthia Carroll, Chief Executive of Anglo American, said: "The acquisition of a majority interest in Revubo is in line with our strategic commitment to grow our global metallurgical coal business to supply our customers from each of the key metallurgical coal supply regions of Australia, Canada and Mozambique.
"Revubo is located in the most attractive area of Mozambique's Moatize coal basin and has a number of infrastructure development options. We look forward to working with the Government of Mozambique and our joint venture partners to progress this exciting prospect."
Anglo American shares were up 0.6% at 10:39.
BS
