Anglo American is investing $200-250mn in the Minas-Rio System in Conceição do Mato Dentro in the state of Goiás, Brazil’s to increase ore production and improve the mine’s maintenance and safety.
This amount makes up a quarter of the $1bn investment package for Phase 3 of the expansion project. The investment was recently announced by the chief executive officer of the Brazilian subsidiary Wilfred Bruijn.
Anglo American produced 24mn mt of iron ore in 2020 in the Minas-Rio system, which was up 4pc compared to production in 2019. Bruijn noted that iron ore production is forecast up 5pc against 2020 levels or 25.2mn mt in 2021. Anglo American expects to reach full capacity production of 26.5mn mt in 2022.
Bruijn noted that while the COVID-19 pandemic looms over the global economy, Anglo American estimates strong demand for both iron and nickel in 2021. Anglo American sells iron 67pc Fe content iron ore, which is expected to continue being coveted by Chinese mills on improved environmental regulations in the country. After a strong H2 2020, Anglo American is forecasting robust Q1 2021 results.
The Minas-Rio system includes a mine, processing plant, and a 529km pipeline that transports the product to the Port of Açu in Rio de Janeiro for export.
The investment and growth has been made feasible by improved EBITDA that rose 80pc to $1.8bn in 2020 from $1.1bn in 2019. The improved financial position was attributed to cost controls, better production, and higher prices in H2 2020. The nickel business segment improved EBITDA by 8pc to $206mn in 2020 compared to the previous year.