Anglo American Plc (AAL), the world’s fourth-largest iron ore producer, said two rulings by local courts in Brazil may have “some sort” of impact on the timeframe of its Minas Rio iron-ore project.
“They didn’t impact at this point and we continue working to mitigate these actions but depending on how long it would take for these actions to be lifted, we may have some sort of impact,” Paulo Castellari, head of Anglo’s iron-ore operations in Brazil, told reporters in Rio de Janeiro yesterday.
Minas Rio has had time and budget overruns since Anglo bought the assets in 2008. Anglo revised costs for the project, its largest, for at least a fourth time, to as much as $5.8 billion in December. Anglo is still scheduled to start production at Minas Rio in the second half of 2013.
Court action is affecting power transmission for the beneficiation plant and “certain areas” in the barrier and dam area, Castellari said. Material dug out of mine pits is processed in plants that separate the ore.
A Minas Gerais (USIM5) state court suspended a license required to install a power line, according to an April 11 e-mailed statement by the state prosecutor’s office. Prosecutor Francisco Chaves Generoso told the court that Anglo failed to meet some of the conditions to obtain the permit, it said.
In March, work was suspended for three days at part of the beneficiation plant, following a legal challenge to allow archaeological studies to take place, Anglo said April 19. In all cases except one, activities were able to continue or were suspended for “just a few days.”
“There is one of the cave areas at the mine site where work is still restricted, despite the rest of the restrictions there being lifted some weeks ago,” Anglo said in an e-mailed response to a query today.
The project includes a mine in Minas Gerais state, a processing plant and a 326-mile (525 kilometer) pipeline to Acu port in Rio de Janeiro state. It will have an initial capacity of 26.5 million metric tons a year.
Anglo lost 0.1 percent to 2,128.5 pence at the close in London today.
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