Anglo American plc's new Brazilian partner plans to transport

Diversified mining giant Anglo Americans’ new Brazilian iron ore joint venture will transport the ore from the mines in Minas Gerais state to a port in Rio de Janeiro state in slurry form through a 550 km long pipeline. This is expected to be the longest slurry pipeline system in the world. The project has the support of both the Minas and Rio state governments.

Last month (May) Anglo American bought 49% of Brazilian group MMX Minera��o e Met�licos’ Minas -Rio Integrated System, so-called because the project combines the development of the mines, the transport system for the iron ore, a terminal at the coast, and a port to load bulk carriers to supply the world markets.

The deal cost Anglo American $1,15-billion, and forms part of it’s programme of investing $3,1-billion in iron ore and nickel in Brazil. The group reportedly plans to invest a further $750-million in the Minas-Rio JV in a second phase and could take its shareholding to 50%; $1,2-billion is to be invested in Brazilian nickel production.

The Minas-Rio JV mining operation has resources of some 714 million tons, and production will start in the first half of 2009. Annual production capacity will be 26,5 million tons.

The iron ore will be turned into a slurry and pumped down the pipeline to the coastal terminal. The pipeline’s capacity will be 26,6 million tons (dry base) a year. One of the reasons for choosing a slurry pipeline to transport the iron ore is that it will have less of an environmental impact than the alternatives, such as a railway, would. Should the the pipeline suffer any breaches, iron ore slurry is inert.

The coastal terminal will include a pelletising plant, with an yearly production capacity of 7,6-million tons. The pellet plant will enter operation in 2010.

The port itself, known as A�u, will be built specifically to export the iron ore produced by the JV and will be able to berth very large ore carriers of 250 000 deadweight tons or more at its piers. The piers will be linked to the onshore terminal by a 4 km long bridge.
The environmental licence needed for the construction of the port has been granted by the state government of Rio de Janeiro, and construction work is expected to start in September.

Anglo American’s Brazilian partner in the JV, MMX, is part of the EBX group, which is active in mining, metallurgy and logistics; real estate; energy; renewable resources; and entertainment. MMX incorporates the group’s mining, metallurgy and logistics interests.

Speaking to the Brazilian newspaper Valor Economico last month, Anglo American CEO Cynthia Carroll described Brazil as a “marvellous” country in which to operate and expressed the hope that, in the future, her group would make further investments in the country. At the signing of the deal with MMX, she expressed Anglo American’s pride in helping drive the project to completion.

Anglo American has been active in Brazil for more than 30 years, in areas as diverse as gold, niobium, nickel, phosphates and, now, iron ore.