Brazilian miner Vale is teaming up with US private equity firm Apollo to bid for Anglo American's niobium and phosphates business in Brazil, three sources familiar with the matter said on Tuesday.

A sale of the assets, used for making fertilisers, could fetch around $1 billion for Anglo American.

The London-listed miner has said it wants to raise as much as $4 billion from divestitures, in order to cut net debt to under $10 billion by the end of the year as it grapples with a commodity price slump.

A spokesman for Anglo said the sale process is progressing as planned. Vale declined to comment, while Apollo did not immediately respond to requests for comment.

Two separate sources said that The Mosaic Company, the world's largest phosphate and potash supplier, could also be interested in the sale process, with binding bids expected in a few weeks.

Mosaic declined to comment.

Vale is the biggest producer of phosphate in Brazil, which in turn is the planet's fifth-biggest user of fertiliser, according to its website. It owns potash mine Taquari-Vassouras, while Anglo's assets include Ouvidor, Brazil's second-largest producer of phosphate rock.

Mining industry sources said that Vale could extract synergies due to the proximity of Anglo's assets to its own, while Apollo could help provide capital at a time when many mining companies are struggling with their balance sheets.

Private equity firms have been seeking to capitalise on the commodity price slump, but have struggled to compete with mining companies which can offer higher prices based on potential synergies in deals.

Vale is itself seeking to slash its net debt by $10 billion and plans to sell assets to help insulate itself against further falls in iron ore and nickel prices, after it announced its biggest loss in decades in February.

Last week it denied reports that it was seeking to raise cash by selling a minority stake in its fertiliser unit.

"They are not selling because they are looking at buying in this area," one of the sources said. - Reuters