Xstrata moves on iron ore miner Sphere

24th August 2010, Comments 0 comments

Anglo-Swiss miner Xstrata on Tuesday announced plans for a friendly takeover of iron ore miner Sphere Minerals, which is active in Mauritania, in a deal worth 428 million dollars (378 million US).

Xstrata said its subsidiary Sidero would buy all shares in Sphere at 2.50 dollars per share -- prompting them to jump 89 cents, or 57.4 percent, to 2.44 dollars after a trading halt.

Xstrata said the target, a mining and exploration company with three large iron ore projects in Mauritania, would complement Xstrata Coal's bulk mining and project development capabilities.

"Xstrata has the financial and technical capabilities to expedite the development of Sphere's green-field growth projects and manage the inherent risks involved," Xstrata chief executive Peter Freyberg said in a statement.

The move is another iron ore acquisition for Xstrata, which bought a stake in an early-stage iron ore project in Congo last year amid a booming market for the commodity on the back of Chinese demand.

Sphere, whose directors have unanimously backed the bid, said it offered an attractive premium.

"Sphere's projects have now reached the stage at which they will benefit from the robust financial capacity and support of a major diversified mining group," Sphere managing director Alexander Burns said.

© 2010 AFP

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