Mark Cutifani. Picture: RUSSELL ROBERTS
Mark Cutifani. Picture: RUSSELL ROBERTS

Anglo American restarted its Minas-Rio iron ore mine and pipeline in Brazil after a shutdown of almost nine months, which generated a $320m loss for the business.

Minas-Rio is one of the most closely watched assets in Anglo after it spent more than $13bn buying and building the project, running over budget and time.

Anglo shut the 529km pipeline linking the mine to the coast at the end of March after it sprang a number of leaks, spilling iron ore slurry into the environment.

The extensive repairs and maintenance of the pipeline since then, including the replacement of a 4km section, have been completed and the mine has resumed operations after securing regulatory approvals to do so, CEO Mark Cutifani said on Friday.

“The extensive analysis confirmed the sound condition of the pipeline and we have taken a number of preventative measures to provide additional reassurance for the long term,” he said.

Among the preventative measures Anglo has put in place is reducing the inspection time frame to two years from five years as well as installing sensors to better monitor the pipeline.

Minas-Rio will deliver between 16-million and 19-million tonnes of iron ore for sale in 2019, one of the factors that prompted Anglo to lift its group production forecast by 5% compared to 2018.

As part of the inspection of the pipeline, the rehabilitation and repairs, and the installation of new monitoring systems, Anglo included government officials and agencies to ensure they were fully appraised of the work under way to expedite the restart of the operation, Cutifani said in an investor call earlier in December.

Minas-Rio is expected to deliver between 22-million and 24-million tonnes of iron ore by 2021, which is short of the 26.5-million tonnes Anglo had planned for the mine.

Cutifani said the intention was still to reach the targeted production and that the mine would deliver ore at $28/tonne free-on-board in the longer term.

“In terms of the run rate, the opening up of the pit room is very important to get the run rate to the desired level. The mining footprint is key to getting the ore quality right so they can get the right flows through the plant to get our 26.5-million tonnes per annum production level,” he said.

There are a number of licences Anglo is working with the government on securing to expand the pit and those were expected to be granted during 2019.

“Those are the two licences that we require for the long-term operation of the asset that lets us open up the footprint so we can get ourselves up to the full production rate,” Cutifani said.

seccombea@businesslive.co.za