Anglo Says It Will Complete $5.5 Billion Acquisition

July 28, 2008

July 28th (Bloomberg) – Anglo American Plc, the world’s fourth-biggest diversified mining company, will complete the $5.5 billion purchase of two Brazilian iron ore mines by Aug. 5 after being delayed by a police probe.

Eike Batista, the mines’ controlling shareholder, is being investigated for alleged gold smuggling and fraudulently winning a railroad concession. Batista said July 14 the accusations were “false and totally unfounded.” The billionaire offered to compensate Anglo for any losses resulting from the probe, the London-based company said today in a statement.

Anglo agreed in March to buy 70 percent of MMX Mineracao e Metalicos SA’s Amapa iron ore mine and the 51 percent stake it didn’t already own in the Minas-Rio project. The price of the steelmaking raw material has risen to a record this year, bolstered by Asian demand.

The combined market value of OGX Petroleo e Gas Participacoes SA, MPX Energia SA and MMX Mineracao e Metalicos SA tumbled as much as 9.79 billion reais ($6.2 billion) on July 11 after a federal raid on Batista’s offices and home.

MMX shares rose 1.02 reais, or 6.7 percent, to 16.21 reais at 11:34 a.m. in Sao Paulo trading, while OGX climbed 8.5 percent to 750 reais. Rio de Janeiro-based LLX shares began trading today after being spun off from MMX.

“Bombastic news such as this tends to have an effect on stocks,” President of LLX Logistica SA Ricardo Antunes said today in an interview in Sao Paulo. “We are very confident that the upward trajectory of the group’s stocks will return, because the group is absolutely transparent and we don’t have the slightest doubt that everything being raised will be cleared up.”

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