Minas Rio on track, says Carroll

[miningmx.com] — ANGLO American’s CEO said on Wednesday that the group’s key Minas Rio iron ore project in Brazil was moving full steam ahead, after repeated delays and cost overruns.

Investors have been worried about more hiccups at the complex project after Anglo said in July it would only be able to start production at the earliest by 2013, partly due to delays in gaining permits.

“It (Minas Rio) is progressing very well, we are pleased,” Cynthia Carroll told Reuters on the sidelines of the G20 CEO Summit in Seoul.

Anglo, the world’s fourth-largest iron ore producer, has billed Minas Rio as one of its most important growth projects.

“We’re very much in line with what I announced in the result presentation. We are still working at progressing about 27 to 30 months delivering the project.”

Costs to build the mine would likely rise by about $750m from the existing estimate of $3.8bn, which had been already hiked earlier in the year, Carroll said in July.

In tandem with its growth strategy, the group has been selling off units it regards as non-core to better focus on narrower group of assets.

“We are continuing to divest those businesses we’ve announced to divest a year ago; we have interest on all of our businesses to be divested,” she said.

The non-core units included Copebras, Brazilian producer of phosphate fertilisers and phosphoric acid.

In September, a Brazilian magazine said miner Vale, the world’s largest producer of iron ore, was weighing bidding for Copebras in a deal that could be worth as much as $800m.

Other businesses Anglo is selling include UK road materials maker Tarmac, steel fabricator Scaw Metals and Brazilian ferroniobium producer Catalao.

In May, Anglo sold its zinc operations to Indian-focused mining Group Vedanta for $1.34 billion.

Carroll was upbeat about the outlook for commodities due to strong demand from Asia.

“It’s driven out of China. GDP growth out of China, GDP growth out of India is very robust and I think that’ll continue.”