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Anglo resumes Minas Rio operation, flags US$320M underlying EBITDA loss in FY'18

Anglo American PLC resumed operations at its Minas Rio iron ore mine in Brazil after making repairs to the pipeline that carries the iron ore in slurry form from the mine to the port.

The operation is expected to ramp up to 1.2 million wet tonnes per month and produce 16 million to 19 million wet tonnes of iron ore in 2019. The company's CEO for Brazil Ruben Fernandes said mid-October that Minas Rio's ramp-up to 26.5 million tonnes per year is likely to be pushed back to 2021 from 2020.

Minas Rio is expected to report an underlying EBITDA loss of US$320 million for 2018, compared to guidance of a loss of US$300 million to US$400 million, according to the Dec. 21 release.

The company was ordered to suspend the mine after multiple pipeline ruptures previously during the year.

Anglo conducted technical inspection of the 529-kilometer pipeline and replaced a 4-kilometer stretch of pipeline, where the two leaks of non-hazardous material had occurred.

Additionally, the intervals for future inspections by specialist pipeline inspection devices was shortened to two years, from five years. A fiber-optic system of acoustic, temperature and vibration sensors will also be fitted to monitor the pipeline's performance.

The company said it expects to receive its step three operating licenses as planned, which are expected in the first half of 2019.