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UPDATE 2-Iron Miner Vale to Buy Brazil's Top Copper Company

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OZ Minerals Working 'Around Clock' to Add to Copper (Update1) 

RIO DE JANEIRO, July 29 (Reuters) - Vale, the world's largest iron ore producer, offered on Thursday to pay 2 billion reais ($1.13 billion) to buy out copper smelter Paranapanema (PMAM3.SA) as part of plans to diversify its sources of revenue.
Vale (VALE5.SA)(VALE.N) offered a premium of 22.4 percent over Paranapanema's average share price in the last 90 days for full control of the world's fourth-largest copper smelter by market value. Vale agreed to pay Paranapanema shareholders in cash, according to a securities filing.
Vale is intensifying growth through acquisitions this year as strong demand for metals in China and other emerging markets drive prices higher globally. The plan fits within Chief Executive Officer Roger Agnelli's goal of depending less on iron ore for revenue and marketing higher-value metals and related products as demand for specialized mining thrives.
&quot;The acquisition of Paranapanema is consistent with the strategic objective of accelerating growth of copper production, and has significant potential to create value for Vale shareholders,&quot; the company said in statement.
Copper sales represented 3 percent of Vale's first-quarter operational revenues, or around $227 million, compared with 55 percent from iron ore.
New smelting capacity will help enhance the value of copper projects currently in development. Total capacity will increase to 458,000 tonnes per year from 300,000 tonnes currently.
SLW Corretora analyst Pedro Galdi said the purchase was neutral because the smelting capacity was considerably below what Vale needs to have.
&quot;The operation is very small, and it diverges a bit from Vale's main business,&quot; he said.
Vale shares were up 0.9 percent at 42.86 reais, slightly topping the 0.7 percent increase in the benchmark Bovespa stock index. Paranapanema shares were up 7 percent at 6.21 reais.
A Paranapanema official said in an interview earlier this year that the company was expecting strong growth in the Brazilian market to help it expand production as the nation's booming economy boosts copper demand. [ID:nN11143491]
This year Vale paid Bunge (BG.N) about $3.8 billion for its domestic fertilizer assets.
In May, Vale sold its aluminum assets to Norsk Hydro (NHY.OL) in a $4.9 billion deal that allowed it to keep a 22 percent stake in the Norwegian company.
($1=1.769 reais) 
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UPDATE 2-Iron Miner Vale to Buy Brazil's Top Copper Company | Shanghai Non ferrous Metals

UPDATE 2-Iron Miner Vale to Buy Brazil's Top Copper Company

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