Anglo shares hammered

Shares of Anglo American tumble 3.5 percent to 246.50 rand in Johannesburg trade after the global mining company raises the estimated cost of its Minas Rio iron ore project, saying it was likely to cost more than $8 billion, the higher end of analyst forecasts.

Analysts have long said spending at the Brazilian project could rise to at least $8 billion from previous Anglo forecasts of $5.8 billion, already twice original estimates.

Cynthia Carroll chief executive of Anglo American. Photo: Leon Nicholas. Credit: Independent Newspapers

“Anglo American is carrying out a detailed cost review to assess the impact of the already announced delay and the other disruptive challenges faced by the project which include high cost inflation across the construction industry in Brazil,” Anglo said.

“The review includes an independent external assessment commissioned by the board.”

Anglo said it would provide further detail once the cost review has been completed. - Reuters