Anglo American sells Brazilian ops for $1.5 billion

Global mining titan Anglo American on Thursday announced the sale of its Brazilian phosphate and niobium mining assets for $1.5 billion (1.9 billion euros) as part of an ongoing restructuring.

China Molybdenum Co. Ltd has agreed to purchase the minerals businesses, which are located in the states of Goias and Sao Paulo in Brazil, Anglo added in a statement.

The transaction is expected to complete in the second half of 2016, while Anglo will use the proceeds to pay down debt. The assets include mines, factories, chemical plants and mineral deposits.

The move is part of an overhaul launched earlier this year by Anglo American chief executive Mark Cutifani in response to collapsing profits and tumbling commodity prices.

"The sale of our niobium and phosphates businesses is another positive step forward in the strategic reshaping of Anglo American that we set out in February," added Cutifani in Thursday's statement.

"The proceeds from this transaction, together with the ongoing productivity and cost improvements we are driving through the business, will enable us to continue to reduce our net debt towards our targeted level of less than $10 billion at the end of 2016.

"This transaction confirms our commitment to creating the new Anglo American, positioned to deliver robust profitability and cash flows."

The company is offloading more than half its mines and exiting iron ore and coal, in order to focus on copper, diamonds and platinum -- which are more profitable.

In response to the news, Anglo's share price surged more than six percent in late afternoon trade on the London stock market.

"The disposal will serve to cut debt and bolster the embattled miner's balance sheet, much to investor glee, leaving it in a much stronger and leaner position both operationally and financially," noted analyst Mike van Dulken at Accendo Markets.