Anglo American and Vale have agreed to merge two of their monster-sized assets in Brazil into one giant iron ore mine.
Through the deal, Vale will transfer its Serpentina operation and integrate it with Minas-Rio next door.
Serpentina already has a resource of 4.3 billion tonnes of iron with a strike or mineralisation length twice that of Anglo’s Minas-Rio site.
“The combination of the two resources also offers considerable expansion opportunities, including the potential to double production,” the companies said in a statement.
Eduardo Bartolomeo, Vale’s chief executive, commented: “Minas-Rio is a Tier-1 asset that will benefit from great synergies with Serpentina's deposit and Vale's logistics.”
Vale will pay US$157.5 million as well as chipping in Serpintina to take a 15% stake in the enlarged Minas-Rio mine with an option to take another 15% for cash once production expands.
Minas-Rio will also be able to utilise Vale’s existing rail and port infrastructure.
Separately, Anglo American announced underlying profits fell by 31% in 2023 to US$10bn.
Revenues were down by 13% to US$30.6 billion while the dividend for the year is cut by 52% to 96c.
Platinum, diamonds and coal were the weak spots offset by improved performances in copper and iron ore.
Impairments also knocked US$2.6 billion off the bottom line as Anglo took a US$1.6 billion hit for De Beers, US$0.5 billion at the Barro Alto nickel arm and job cuts at Amplats.
“There is no doubt that while the immediate macro picture presents some challenges for our PGMs and diamonds businesses, the demand trends for metals and minerals have rarely looked better,” said chief executive Duncan Wanblad.
Shares in Anglo jumped 6% to 1,816p as the numbers weren't as bad as feared.