Dineo Matomela
Iron ore demand was expected to grow by 40 percent in the medium to long term, propelled by China, according to the chief executive of Anglo American’s Minas Rio project in Brazil, Stephan Weber.
He said the challenge remained finding high quality assets to meet that demand.
Weber was speaking to journalists during a sponsored tour of the Brazilian assets of diversified mining company Anglo last week.
Anglo bought the Minas Rio project in 2007 for $5.5 billion (R44.3bn). It is one of the world’s largest mining projects, expected to export 26.5 million tons of iron ore a year from 2013 through a 525km pipeline.
“Anglo American is positive about the iron ore project, and we are well-positioned and excited about it,” Weber said.
Minas Rio is one of four key growth projects identified by Anglo. The other projects are Kumba’s Kolomela iron ore project in South Africa, previously known as Sishen South, the Barro Alto nickel project in Brazil and the Los Bronces copper expansion in Chile.
Development costs at Minas Rio were expected to climb 20 percent to $5bn because of delays in obtaining permits, the firm said earlier this year.
“It’s not easy in terms of licensing, as the country (Brazil) is mature in terms of licensing,” Weber said.
Anglo had announced earlier this year that $210 million in costs would be added to the project while another $180m a quarter might be added due to “scheduling related costs”.
A licence for a tailings dam had been received based on mineral rights, which Anglo got. About R1.9bn had been spent on the project to date, and the company was getting permission from landowners to install the pipeline, he said.
So far 1 300 direct and 3 500 indirect jobs have been created.
Meanwhile, Chile’s state-owned copper company, Codelco, last week filed a court application to obtain information about Mitsubishi’s purchase of a stake in the Anglo American Sur unit in Chile to prepare a lawsuit to have the $5.39bn deal cancelled.
Codelco lodged a pre-judicial preparatory measure in the 17th Civil Court of Santiago, seeking details of Mitsubishi’s purchase of a 24.5 percent stake announced last month, the company said in a statement on Friday.
Mitsubishi had not received any notification of the issue, it replied yesterday.
Santiago-based Codelco was preparing a lawsuit to overturn the “abusive” transaction that was aimed at thwarting its right to buy 49 percent of Anglo America Sur under a 2002 contract, it said, adding that it would seek damages.
Anglo and Codelco are disputing terms of the contract covering assets that include Los Bronces, set to become the world’s fifth-biggest copper mine. Mitsubishi’s deal with Anglo followed an October announcement that Mitsui would provide $6.75bn to Codelco to finance the purchase of the full 49 percent Sur stake under the option contract.
Anglo’s stock fell 0.7 percent to close at R311.28 on the JSE on Friday.