Grupo Mexico sells aggregates unit

Grupo Mexico has agreed to sell its aggregates division, American Limestone, to CSR America, a division of the CSR Group, for US$211 million.

American Limestone is the second division of Asarco to be sold by Grupo Mexico since the latter acquired the New York-based copper producer late last year in a deal worth US$2.4 billion. It earlier sold Asarco’s specialty chemicals division, Enthone-OMI, to the U.K.-based Cookson Group for US$512 million.

Grupo Mexico borrowed US$817 million from Chase Manhattan Bank to finance the Asarco acquisition — a debt which it is now eager to eliminate. The sale of non-core assets is expected to reduce the debt to slightly less than US$100 million. Grupo Mexico intends to eliminate the remainder of its debt through other transactions, including the sale of warrants. The American Limestone deal is expected to close in June. American Limestone produces 8 million tons of aggregate per year from nine quarries in Tennessee and Virginia.

In other news, Grupo Mexico has confirmed it is in discussions with Codelco (Corporacion Nacional Del Cobre de Chile) for a possible exploration joint venture in Peru.