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Last Updated: Monday, 26 February 2007, 16:02 GMT
Brazilian firm buys coal producer
Coal mine
Coal is a highly-prized commodity
Brazilian metals giant Companhia Vale do Rio Doce (CVRD) is to buy Australian coal producer AMCI for $661m (336m).

CVRD, the world's largest iron ore producer, will also assume $124m in debt as part of the deal.

Brisbane-based AMCI produces eight million metric tons of coal a year and has reserves of more than 100 million.

CVRD said the deal would provide it with world-class assets and enable the firm to diversify its operations both strategically and geographically.

Race for resources

The Brazilian business already holds investments in two Chinese coal companies and is exploring the possibility of developing a major coal deposit in Mozambique.

AMCI's pits and open-cast mines are based in Queensland and New South Wales.

CVRD said the Australian business had significant growth potential.

"The acquisition of AMCI created a strong growth platform to develop CVRD's coal business and contributes to diversify our product portfolio, providing simultaneous geographic diversification into an investment-grade and one of the richest natural resources countries in the world," the firm said in a statement.

The metals and commodities industries have seen a spate of takeovers recently as the rapid economic growth of countries such as China and India has put a premium on access to abundant and efficient sources of energy.

CVRD bought Canadian nickel mining firm Inco for $16.8bn last year, while fellow Brazilian firm CSN failed in its bid to buy Anglo-Dutch steel company Corus earlier this year.

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