Anglo to invest $770m in Brazil iron ore port project

Brasilia: Anglo American, the world's fifth-largest base-metals producer by market value, agreed to invest as much as 1.3 billion reais ($770 million, Dh2.8 billion) in its iron ore port project with billionaire Eike Batista's LLX Logistica SA to export the mineral from Brazil.

Under a revised 25-year agreement, Anglo will pay $7.10 for each metric tonne of iron ore shipped from the Porto Acu joint venture, LLX said in a regulatory filing. The accord will generate $190 million of annual revenue for LLX, according to the filing. London-based Anglo owns 49 per cent of the port.

Anglo, suffering delays and cost overruns at its Minas Rio development in Brazil, is spending about $17 billion to expand production of copper, iron ore, nickel and other metals as demand from Asian nations grows.

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The Minas Rio iron-ore complex, its biggest project, includes a mine, a processing plant and a 525-kilometre pipeline that will transport the mineral to Porto Acu.

The company secured a key licence from Brazil this month allowing it to progress with building Minas Rio after delays in getting permits and design changes increased costs.

It said in July the cost of the development may rise by about a fifth to $4.6 billion because of the delays.

Anglo said on December 10 that it will start work on the project in March and deliver its first ore 27 to 30 months after that.

It had initially planned to start mining this year.

Anglo fell 0.5 per cent to 3,307 pence in London trading on December 24. It's up 22 per cent this year, less than a 28 rally in the FTSE All-Share Mining Index.