LONDON (Reuters) - Anglo American Plc will take a $4 billion writedown on its Minas Rio iron ore operation in Brazil after delays and cost overruns forced the mining group to increase expenditure on the project.
The company also said on Tuesday that it expects capital expenditure for the project to increase to $8.8 billion.
"We are clearly disappointed that the diversity of challenges that our Minas Rio project has faced has contributed to a significant increase in capital expenditure," outgoing Chief Executive Cynthia Carroll said.
"Despite the difficulties, we continue to be confident of the medium and long-term attractiveness and strategic positioning of Minas Rio and we remain committed to the project."
Minas Rio, a leading iron ore project in Brazil, is Anglo's most significant failure of recent years and was largely responsible for Carroll's fall from grace.
Anglo bought its first stake in Minas Rio in 2007, taking control in 2008 with a $5.5 billion deal with Brazilian billionaire Eike Batista's MMX - right at its peak.
The project was intended to help to diversify a company that was still dependent on South Africa for the bulk of its revenue, but has instead been a bruising top-of-the-market deal.
'CONSTANT DISAPPOINTMENT'
Anglo spent $4.8 billion buying Minas Rio - excluding the value of the Amapa mine, bought as part of the original deal but which Anglo has agreed to sell. It has spent $5 billion on developing it so far and said last year that total development costs could exceed $8 billion - more than three times original estimates.
"This asset has been a constant disappointment in terms of project delivery and I think it was largely expected that we would get this sort of writedown," Nomura International analyst Sam Catalano said.
"The challenge that remains for Anglo is to deliver it on the revised timeline and price that they've given us."
The company said it is still targeting first ore on ship by the end of 2014 despite the challenges facing Minas Rio.
Anglo's announcement comes after Rio Tinto
Other mining companies, such as BHP Billiton
Minas Rio is one of the biggest challenges facing Anglo's incoming chief executive Mark Cutifani, a former coal miner who will join the company from Johannesburg-based AngloGold Ashanti in March.
Development costs in Brazil have been driven higher by forthcoming major events such as the Olympics in 2016 and next year's soccer World Cup tournament, which have increased demand for labor.
Shares in Anglo American were down 0.6 percent at 1862 pence at 0802 GMT, valuing the company at $41.2 billion.
Elsewhere in the sector, Anglo American Platinum , the world's largest platinum producer, said on Tuesday that it had conducted "constructive" consultations with the South African government about a company restructuring that could lead to 14,000 job cuts.
(Editing by David Goodman)
Source: http://news.yahoo.com/anglo-american-4-billion-writedown-minas-rio-project-071552229--finance.html
pirate bay Psalms 91 once upon a time once upon a time bachelor RG3 Monsters University
কোন মন্তব্য নেই:
একটি মন্তব্য পোস্ট করুন