Fin24

Anglo's Brazil start-up delayed

2010-07-08 22:00

Sao Paulo - Land tenure issues in Brazil will probably delay the start-up of Anglo American's Minas Rio iron ore project by one year to 2013, Dow Jones Newswires said, citing a person with knowledge of the situation.

Anglo American [JSE:AGL], the world's second largest mining company, is having problems acquiring land for the construction of a 310 mile-long ore slurry pipe, which is central to the mine's operation, Dow Jones reported. The company is currently negotiating with about 1,500 landowners, the wire said.

Anglo American bought the huge mine in early 2008 from Eike Batista, Brazil's richest man, as part of a $5.5bn acquisition of iron ore assets in Brazil, including a 69% stake in the Amapa project.

An Anglo spokesperson in London said the company declined to comment on speculation and that the group would update the market on all of its projects when it releases interim results on July 30.

Minas Rio, which is a high-quality iron ore deposit with an average of 68 percent iron content, has the potential to produce 80 million tonnes per year. In February, Anglo American Chief Executive Cynthia Carroll said the project would be ready by 2012, adding that the cost for the first phase of Minas Rio had risen 41% to $3.8bn, the wire said.

- Reuters