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Anglo exec flags delay to planned ramp-up of Minas Rio mine

Anglo American PLC's planned ramp-up of the Minas Rio iron ore mine in Brazil to 26.5 million tonnes per year is likely to be pushed back to 2021 from 2020, Reuters reported Oct. 16, citing Ruben Fernandes, the company's CEO for Brazil.

"It is not a very firm date because it depends on the plant's performance," Fernandes said, adding that production is expected to hit the targeted pace by late 2020.

Meanwhile, the mine's operations will restart in November or December.

The company was forced to halt operations at the site after two mineral pipeline ruptures in March. It is working to replace about 4 kilometers of the pipeline after it discovered cracks in the welding during inspections.

Anglo expects to receive key operating licenses for Minas Rio in May 2019.

Reuters reported in late June that Anglo suspended a US$1 billion iron ore supply contract with Bahrain Steel BSCC after the mining major declared force majeure due to the spills at Minas Rio. Fernandes acknowledged that the companies were already in arbitration to renegotiate the contract.

The company also declared force majeure on a contract with Ferroport, a joint venture with port operator Prumo Logistica SA, and is now in arbitration with the company over the contract.

Fernandes reiterated that Anglo expects to take an earnings hit of between US$300 million and US$400 million this year due to the leaks.