Anglo American Plc announced Tuesday it is to invest upwards of 1.3 billion reais with its Brazilian partner LLX Logistica SA in a port project. Anglo American Plc is the world’s fifth-largest base-metals producer by market value. In a release, the Brazilian firm reiterated Anglo American Plc had agreed to invest as much as $770 million in its iron-ore port project with the Brazilian firm.

Anglo American’s move with Brazilian billionaire Eike Batista’s LLX Logistica SA is geared at the export of the mineral (iron ore) from Brazil. Under a revised 25-year agreement, Anglo will pay $7.10 for each metric ton of iron ore shipped from the Porto Acu joint venture, LLX said in a regulatory filing yesterday. The accord will generate $190 million of annual revenue for LLX, according to the filing. London-based Anglo owns 49 percent of the port.

Anglo, suffering delays and cost overruns at its Minas Sul development in Brazil, is spending about $17 billion to expand production of copper, iron ore, nickel and other metals as demand from Asian nations grows. The Minas Sul iron-ore complex, its biggest project, includes a mine, a processing plant and a 326-mile (525-kilometer) pipeline that will transport the mineral to Porto Acu.

The company secured a key license from Brazil this month allowing it to progress with building Minas Sul after delays in getting permits and design changes increased costs. It said in July the cost of the development may rise by about a fifth to $4.6 billion because of the delays.

Anglo said Dec. 10 that it will start work on the project in March and deliver its first ore 27 to 30 months after that. It had initially planned to start mining this year. Miner Anglo American Plc said it secured a 25-year port tariff agreement for the Minas Rio iron ore project in Brazil and will fund a greater share of the development cost of the first phase of the port.

Anglo expects to spend an additional $525 million relating to the port, taking the miner's total share of development costs to about $1.2 billion. Initial works on Minas Rio, one of Anglo's biggest growth projects, is expected to begin in March after being hit by delays and cost increases.

29 Dec 2010.