[miningmx.com] – DELAYS in the development of Brazilian iron ore mine Minas Rio will cost Anglo American up to $5bn in write-downs, according to the Sunday Times.
The UK newspaper said yesterday Anglo planned to announce the write-downs, which also include impairments at its 78% owned Anglo American Platinum (Amplats), before its year-end results in February.
Minas Rio was hit by several injunctions from the Brazilian authorities preventing its development, the latest (and last) of which was removed in December. The delays and budget overruns are thought to be a contributing factor in shareholders’ losing their patience with Cynthia Carroll, Anglo CEO, who resigned last year.
Anglo American bought the Minas Rio mine for $4.7bn in 2007 which is now estimated to cost $8bn, the Sunday Times said. Analysts told Miningmx last year the full capital cost could be closer to $14bn. First iron ore shipments are not expected until 2014.
Amplats announced last week it planned to cut production 400,000 ounces a year with the potential loss of some 14,000 jobs.
A spokesperson for Anglo American declined to comment on the prospect of write-downs which have been a recurring theme for many of the world’s top mining companies.
Last week, Tom Albanese, CEO of Rio Tinto, resigned after the firm announced it had written-down some $14bn of which about $3bn related to its $4bn investment in Riversdale Mining, a Mozambican coking coal prospect.
