Anglo American in talks with Vale to jointly develop Serpentina iron ore project

Global mining company Anglo American has been in preliminary discussions with Vale, one of the world's largest iron ore producers, to jointly develop the Brazilian miner's Serpentina project, the company said Dec. 29.

The Serpentina project is in three municipalities in the Brazilian state of Minas Gerais and comprises mining rights contiguous to Anglo American's integrated Minas-Rio iron ore operation in Brazil.

"These discussions are preliminary in nature and there can be no certainty that any agreement will be reached or, if any agreement is reached, on the terms or scope of any such agreement," Anglo American said in a statement.

Vale, which according to a Dec. 23 media report was evaluating a stake in Anglo American's Minas-Rio project, said Dec. 28 it has made no decision regarding a purchase.

"In its ordinary course of business, Vale constantly evaluates strategic alternatives and partnerships to create value for its shareholders, always in light of the strict discipline in capital allocation," Vale said in a statement.

Vale has said that it could look at Anglo's Minas-Rio logistics infrastructure, which includes a mine, processing plant, a 529 km (328 miles) pipeline and a dedicated terminal at the Port of Açu, in Rio de Janeiro.

Anglo's iron ore production for the July-September period rose 15% year on year to 16.9 million wmt, with output at its Minas-Rio operation up 22% at 6.1 million mt. Minas-Rio's production in the same quarter a year ago had dropped due to planned maintenance.

Anglo said that lower plant availability this year has caused Minas-Rio's production outlook to be lowered to about 24 million wmt, from 24 million-25 million wmt, previously.