Iron ore majors ramp up supply even as China faces challenges
Iron ore is one of the year’s worst performing major commodities, slumping by almost a quarter as China’s property crisis drags on.
Anglo American (LON:AAL) may no need to shut its massive Minas Rio in Brazil after all, since the company expects authorities for the state of Minas Gerais, where the iron ore operation is located, to issue the long-awaited permits this month.
According to O Petróleo (in Portuguese), the company said it was confident it would receive approval by Friday. It would, however, still need an operating licence from the state environmental agency to kick off operations.
Receiving the necessary licences would allow the company to continue operating in the state of Minas Gerais, where the iron ore mine is located, for at least another 15 years.
Anglo, which has already been granted permission for a second phase at Minas Rio, has been trying for months to secure the construction and environmental licence for the mine’s third and last expansion, but has faced several roadblocks along the way.
The company has warned it would have to close down the operation in September this year because, without that extension, Minas Rio would run out of ore.
Ruben Fernandes, president of Anglo American Brazil, said last week that receiving the necessary licences would allow the company to continue operating in the region for at least another 15 years.
The century-old company has long said the third phase is critical for Minas Rio to reach its full capacity of 26.5 million tonnes of iron ore a year by 2019.
Together with increasing the current pit’s size, the project is expected to generate 800 new jobs during construction, adding to the more than 4,500 positions the project has already created.
