Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Anglo American (LON:AAL) has increased the capital expenditure budget for its largest project in development, the Minas-Rio iron ore mine in Brazil, by 15%, the London-listed major miner announced on Tuesday.
That takes the capex for the project up to US$5.78 billion.
Anglo American cites “a number of irregular issues” for the rise in costs, including “the discovery of caves at the beneficiation plant site which require specialized assessment, continue to cause delays to the work scheduling, in addition to outstanding land access and an evolving permitting environment.”
The company is targetting the second half of 2013 for the first shipment of iron ore from the mega-project.
Anglo American was granted a licence to develop Minas-Rio in 2010. The project includes construction of a mine, beneficiation plant, 525km slurry pipeline and port facility.
When completed the facility would process 26.5 Mtpa iron ore pellet feed.
In other news, Anglo American announced the commissioning of Kolomela – a new 9 Mtpa iron ore mine in South Africa’s Northern Cape – follows the delivery of the 36,000 tpa Barro Alto nickel project in Brazil in March, and the expansion to double production from the Los Bronces copper mine in Chile, announced in November.
Comments
maurice
I cannot believe the incompetent CEO of Anglo has not been fired yet.