Anglo American has reached an agreement with China Molybdenum to sell its niobium and phosphates businesses for $1.5bn.

The amount will be payable to Anglo American at closure of the deal, subject to certain closing and post-closing adjustments.

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The fully owned niobium and phosphates businesses are located in Goiás and São Paulo in Brazil.

The phosphates business consists of a mine, beneficiation plant, two chemical complexes and two further mineral deposits. While the nobium business comprises one mine and three processing facilities, two non-operating mines, two further mineral deposits, as well as sales and marketing operations in the UK and Singapore.

"Proceeds from this transaction will enable us to continue to reduce our net debt towards our targeted level of less than $10bn at the end of 2016."

Both businesses generated EBITDA of $146m in 2015.

Anglo American CEO Mark Cutifani said: "The sale of our niobium and phosphates businesses is another positive step forward in the strategic reshaping of Anglo American that we set out in February.

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"The proceeds from this transaction, together with the ongoing productivity and cost improvements we are driving through the business, will enable us to continue to reduce our net debt towards our targeted level of less than $10bn at the end of 2016.

"This transaction confirms our commitment to creating the new Anglo American, positioned to deliver robust profitability and cash-flows through the price cycle."

The transaction is subject to approval of People’s Republic of China’s regulatory authorities, and the approval of CMOC shareholders.

Anglo American received binding commitments from the two major CMOC shareholders, who hold 63% of CMOC shares to support the deal.

The deal is expected to close in the second half of 2016. Anglo American intends to use proceeds to cut its debt.