Anglo American Obtains Operating License for Minas-Rio Project in Brazil

Anglo American (LSE:AAL) (JSE:ANGLO) has moved one step closer to production at its Minas-Rio project in Brazil as the UK-based company has obtained an operating license for the iron ore mine. 

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The permit, from Brazil’s environmental-protection agency Ibama, is for the project’s mine and processing plant in Minas Gerais state. In addition, the company received an operating license last week for the 525-kilometer pipeline that will carry the iron ore to the company’s ore docks at the Port of Acu in Rio de Janeiro state.

"The 525 km pipeline to the port at Açu has been laid. At the port, construction is continuing as scheduled and good progress has been made on the breakwater, with 26 of 33 caissons installed for first ore on ship,” CEO Mark Cutifani said in September.

The $14-billion project, which is located on the south-east border of the Sao Francisco Craton in Brazil, is expected to produce roughly 11 million to 15 million tons of iron ore during its first year of production. Anglo American will increase output to 26.5 million tons a year in 2016.

Anglo is spending $2.2 billion in 2014 on the project, with an additional $1 billion designated for next year, which will bring the total capital cost of the project to $8.8 billion.

The mine, pipeline and port will cost nearly $9 billion when complete.

The Minas-Rio iron ore project is the largest foreign investment in Brazilian history. The company acquired the rights to the project in 2007 from Brazilian billionaire Bike Batista for $5.5 billion.