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http://www.businessweek.com/news/2013-04-01/anglo-discusses-port-with-batista-at-8-dot-8-billion-brazil-project

Bloomberg News

Anglo Discusses Port With Batista at $8.8 Billion Brazil Project

April 01, 2013

Anglo American Plc. (AAL) said its biggest project, the $8.8 billion Minas-Rio venture in Brazil, is 60 percent complete as the London-based miner discusses terms of its port terminal agreement with Eike Batista.

Anglo is in talks with Batista’s LLX Logistica SA (LLXL3) to allow the billionaire to open their jointly owned terminal at the Acu port in Rio de Janeiro state to other investments, Paulo Castellari, Anglo’s head for iron ore in Brazil, said today. The company expects to sign “operational agreements” with LLX by June, he said.

“We are in negotiations to see what else will be done there,” Castellari, 42, told reporters today during a meeting at the company’s offices in Belo Horizonte, Brazil. “We have priority for 26.5 million tons and the right to expand, that’s guaranteed,” he said, declining to say what Anglo is asking Batista as compensation to allow the terminal for other uses.

Anglo said in January it would write down $4 billion on Minas-Rio and increase the iron-ore project’s budget for a sixth time after prior blowouts forced Chief Executive Officer Cynthia Carroll to quit. The venture has suffered licensing impediments and rising costs since Anglo bought it in 2008, leading to a delay of at least four years to start production.

Minas-Rio, which includes a mine, processing plant and a 525-kilometer pipeline to an iron-ore terminal at the Acu port in Rio state, will have an initial capacity of 26.5 million metric tons a year. Anglo, which says the project contains at least 8 billion tons of resources, expects to make the first shipment in late 2014.

Anglo continues talks with Ternium SA (TX:US) for an iron-ore supply contract from Minas-Rio, Castellari said today, after saying last year that an agreement would be signed by June 2012.

Anglo dropped 1.7 percent in London on March 28 before the Easter break and has slumped 28 percent in the past 12 months.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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