Anglo American forges ahead with $8.8 billion Brazil project despite huge overruns
Anglo American is staying the course with its nearly $9 billion Minas Rio project – three times more costly than its initial projection – despite not having mined a single ton of iron ore, the Wall Street Journal reported Tuesday.
Former Anglo CEO Cynthia Carroll this week held to her claim that the project, three years behind schedule, will be profitable.
Despite Minas Rio’s logistical headaches, including mining “under cattle farms crisscrossed by strips of red dirt roads,” Anglo will proceed in the hope that China’s “voracious demand for steel” will remain as such.
Newly selected CEO Cutifani says that his company still believes “in a world where iron ore [mining] can be profitable at a cost of 50 dollars per ton.”
Minas Rio represents a real test of Cutifani’s ability to manage costs.