(qlmbusinessnews.com via telegraph.co.uk – – Tue, 24 Apr 2018) London, Uk – –
Mining group Anglo American expects its profits for the year to be $300m to $400m (£215m to £287m) lower after being forced to suspend operations at an iron ore mine in Brazil due to a cracked pipe.
Production at Anglo’s Minas Rio mine has been halted for 90 days to allow the company to make a thorough inspection of the oil slurry pipeline that had sprung what it called two “minor” leaks.
Staff have been put on leave and production is now not expected to resume until the end of the year.
Last year Minas Rio produced 16.8m tonnes of iron ore, used to make steel. Its output was already expected to be lower this year because of delays to its expansion plans.
Earnings before interest, tax, depreciation and amortisation (ebitda) at Minas Rio were $435m in 2017, only slightly higher than the amount Anglo expects to lose on the unit this year.
Mark Cutifani, chief executive, said Anglo’s priorities were to “ensure the integrity of the pipeline and the protection of the natural environment, while providing as much clarity as we can for our employees, customers and other business stakeholders”.
Anglo’s earnings hit $8.8bn last year as the mining group, which also mines diamonds, copper, coal and platinum, enjoyed a rise in commodity prices.
The mine has been much delayed by permitting problems and spiralling costs. Anglo has taken $11bn of writedowns on the project, on top of the $13bn cost of buying it and building it.
Anglo shares fell 1pc in morning trade to £17.59.
By Jon Yeomans