Zamin Ferrous signs binding agreement for purchase of Anglo American's Amapa iron ore mine

KOLKATA: Zamin Ferrous, an international miing group with Indian leadership, has signed a binding agreement for the purchase of the Amapa iron ore mine in Brazil from Anglo American (70%) and Cliffs Natural Resources (30%). Amapa produced 4.8 million tonne (mt) of iron ore in 2011 and is expected to increase production over the coming years. Amapa has a resource of 271 mt and potential exists for further expansion in the region. The sale and purchase is subject to regulatory approvals in Brazil. The transaction is expected to complete in 2013. With the acquisition of Amapa, Zamin believes it can produce around 45 mt per annum as a group within five years.

Zamin Ferrous was founded by Mr Pramod Agarwal, who has over thirty years' experience in the global commodities business. With long term relationships with Chinese, Indian and Russian steel companies Zamin has identified and developed resources in highly prospective areas in South America that have previously received little inward investment. Zamin 's CEO is Mr Malay Mukherjee, a widely experienced steel industy man, a former CEO of Essar Steel, who also spent a number of years working with Mr L N Mittal.

Commenting on the agreement, Mr Pramod Agarwal commented: "Amapa is an important step in Zamin's ambition to become one of the big global iron ore producers. The cash flows will assist Zamin's ability to develop other important projects such as the 18 mtpa Valentines Project in Uruguay. Zamin is buying at a good time in the cycle with iron ore prices recovering recently following the collapse in the middle of 2012 and renewed confidence in the industry's prospects."

Zamin Ferrous has been operating in Brazil since 2005 and owns three significant assets with a combined 1500 mt potential resource in that country. This includes the Zamapa iron ore processing facility in Amapa state which will produce 1.5 mt of iron ore in 2013; 50% of the Susa iron project, which is located in the state of Rio Grande Norte; and the Greystone project, a large iron ore deposit in the south east of Bahia State. Zamin also owns the significant 2500 mt Valentines Project in Uruguay which is expected to get planning go-ahead later this year and is involved in iron ore exploration projects in Australia and Indonesia.