Vale Elects New CEO, Bids $1.125B for Metorex
Despite this success, Agnelli's departure was preceded by rumors over a period of months that leadership in Brazil's government wanted to see him go because of a perceived lack of sufficient internal investment by Vale in Brazil, especially in its steel and fertilizer industries. About 64% of Vale's 2011 $24-billion capital spending budget will be for projects located in Brazil.
On April 8, shortly after the announcement of Agnelli's impending departure, Vale announced it had agreed to terms for an offer to acquire South Africa-based Metorex Ltd. in a transaction valued at $1.125 billion. Metorex has two operating mines, Chibuluma located in Zambia, in which it holds an 85% interest, and Ruashi in the DRC, in which it holds a 75% interest. Chibuluma has an estimated capacity of 18,600 mt/y of copper contained in concentrates and proven and probable reserves of 3.5 million mt grading 3.8% copper. Ruashi operates a mine and SX-EW plant that have an estimated capacity of 36,000 mt/y of copper cathodes and 4,500 mt/y of cobalt, based on proven and probable reserves of 22.2 million mt, grading 2.4% copper. Metorex also has three projects in the DRC, one in the development phase and two in the exploration phase.
In 2010, Metorex produced 51,569 mt of copper and 3,622 metric mt of cobalt.
The Vale statement said, "The proposed acquisition is consistent with our goal to become one of the largest copper producers in the world. Moreover, the majority of Metorex assets are located near two of our central African copper projects, Konkola North under development in Zambia and Kalumines under feasibility study in the DRC, which will enable Vale to exploit synergies."
The Konkola North and Kalumines projects are part of Vale's joint venture with South Africa-based African Rainbow Minerals.