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Global diversified miner Anglo American PLC (AAUK) would consider bringing in a partner to develop the latter stages of its Minas-Rio iron ore project in Brazil, company executives said Friday.
Minas-Rio is the biggest of Anglo's three main development projects. It has come in for particular scrutiny due to its price tag - the miner paid $6.65 billion to acquire it - and delaying gaining necessary permits.
Anglo has budgeted another $3.6 billion for phase one of the project, which is on track for first production in the second quarter of 2012 and output of 26.5 million tons of iron ore in 2013.
Chief Executive Cynthia Carroll said the company is working to identify the capital required to develop the next two phases of the project.
"Once we've done that and if we determine it would be possible to accelerate the project and the expansion of the project we might consider a partner at that time," she said in a call with reporters.
Anglo said the project has potential to deliver up to 80 million tons of iron ore a year, but has neither approved that expansion nor identified ways to fund it. If it is fully developed, it would be among the lowest cost and largest iron ore mines in the world, Anglo said.
Chief Financial Officer Rene Medori said that even with a partner, Anglo would maintain management control of this project.
Last month, a person familiar with the situation said Anglo is in the early stages of exploring the sale of a 30% stake in the project.
Anglo at its interim results Friday highlighted Minas-Rio and two other major projects - the Los Bronces copper mine in Chile and the Barro Alto nickel project in Brazil - as it continues its defense against a merger proposal from rival Xstrata PLC (XTA.LN).
Company Web site: www.angloamerican.co.uk
-By Jeffrey Sparshott, Dow Jones Newswires; +44 (0)207 842 9347; jeffrey.sparshott@dowjones.com
(END) Dow Jones Newswires
07-31-09 0736ET
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