Advertisement

Anglo open to Minas-Rio partnership, says Carroll

Anglo American could bring a partner into its flagship Minas-Rio iron ore asset in Brazil, Cynthia Carroll, the outgoing chief executive of the global mining group, said yesterday on the sidelines of the African Mining Indaba in Cape Town.

The Minas-Rio project – a bruising top-of-the-market deal that contributed to Carroll’s fall from grace and her planned departure from the company – has been hit by delays and cost overruns. Last week, Anglo wrote $4 billion (R35.5bn) off the value of the asset and said the mine would cost $8.8bn to develop, more than three times original estimates.

“If it makes economic sense we will pursue it. We have been talking about a partnership for some time. We really need to establish what that value is,” Carroll said.

She declined to comment on any ongoing discussions.

Anglo, like many operators in Brazil, has come under pressure from rising costs in a country where mining activity is growing and the construction sector is booming ahead of the 2016 Olympic Games and the 2014 soccer World Cup.

But Carroll said she was “confident” Anglo would stick to revised cost estimates.

“There are always going to be surprises, but we have enormous support from the government at all levels… They understand; they want that project to get off the ground because it means jobs and tax revenues for them,” she said.

Carroll, who announced last year that she would step down, will be replaced by current AngloGold Ashanti chief executive Mark Cutifani. Top of Cutifani’s to-do list is the overhaul of Anglo’s platinum arm, Anglo American Platinum (Amplats), which is being squeezed by weak demand, rising costs and labour unrest.

The unit last month announced a plan to mothball two mines and sell one, potentially leading to 14 000 job cuts. The move met fierce resistance from the government, politicians and unions. The company said last week that it would delay the two-month consultation period by two weeks.

“It is not a matter of pushing back. We have a plan and we are going to work through that plan,” Carroll said.

“I spent hours with (the) minister of mines and minister of labour a few weeks ago, and we all agreed we need to be around the table together. We have a very comprehensive social plan.”

Carroll said the aim was to protect the business and 45 000 jobs. Amplats on Monday unveiled the first annual loss in its history.

Carroll said neither the industry nor Amplats was in a sustainable position.

“The market outlook has changed. A few years ago, all of us in the industry were forecasting 3 to 4 percent growth and now it is 2.5 percent.”

Amplats shares closed 0.54 percent higher at R449.97 yesterday. Anglo shares fell 0.04 percent to R270.39.

SHOW ALL
Advertisement