Johannesburg - Shares of Anglo American [JSE:AGL] tumbled 3.5% to R246.50 on the JSE after the company raised the estimated cost of its Minas Rio iron ore project, saying it was likely to cost more than $8bn, the higher end of analyst forecasts.
Analysts have long said spending at the Brazilian project could rise to at least $8bn from previous Anglo forecasts of $5.8bn, already twice original estimates.
The stock was also hit by a trading update from subsidiary Kumba Iron Ore.
Kumba’s shares also took a beating, sliding 2.2% to R529.01 after the producer of the steel making ingredient said full-year earnings would likely fall by at least 20%, hit by a wildcat strike at its Sishen Mine and a decrease in export iron ore prices.
The company says the Sishen strike has so far cost it 2.6Mt of lost production. Attendance rates in Sishen's mining production area remain low, which is hampering output, Kumba says.