Anglo resumes work at Minas Rio
Exame reports Anglo American can resume construction works of an electricity transmission line for its iron ore project Minas Rio in Brazil after receiving the green light from Brazilian environmental authorities.
The lifting of the injunction against building the transmission line – which passes through environmentally sensitive forest – was the final hurdle Anglo had to clear, but the damage to Anglo budget for the project has already been done.
Initial project capex of $3.6bn has been revised on more than one occasion since Minas Rio was acquired in 2007 and last month the London-listed miner said the final bill is predicted to come in at a whopping $8bn.
Some analysts put that figure at $8.8bn thanks in part to the fact that Anglo has to compete with Brazil's infrastructure projects associated with the Olympics and Soccer world cup in 2014 and 2016.
Add the acquisition cost of $6bn and Minas Rio turns into a minimum $14 billion project, becoming the world's most expensive iron mine with costs of $350 per tonne according to SBG Securities.
Compare that to today's iron ore price of $135.