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Anglo American in No Rush to Sell Stake in Minas-Rio, CEO Says

Sept. 25 (Bloomberg) -- Anglo American Plc, the mining company investing $16 billion in Brazil, is in no rush to sell a stake in its biggest venture after missed targets and cost overruns.

The London-based mining company will probably need to wait some months for prospective investors to see Anglo can deliver its $8.8 billion iron-ore Minas-Rio project in Brazil, Chief Executive Officer Mark Cutifani told reporters yesterday. While Anglo got “expression of interests” from potential buyers, the company received no firm offers for a piece in the venture, he said.

“When you have a track record for not hitting your targets, I think it takes time for people or for you to rebuild trust,” Cutifani said at a press conference during the Brazilian Mining Congress in Belo Horizonte yesterday. “We are not looking to rush the process, we are very happy with what we see, we have a good project.”

Anglo said in January that it will write down $4 billion from the value of Minas-Rio and increase the iron-ore project’s budget for a sixth time after suffering licensing shortages and rising costs since it bought the venture in 2008. Anglo hired Goldman Sachs Group Inc., Morgan Stanley and UBS AG to sell as much as 49.9 percent of Minas-Rio, two people with direct knowledge of the matter told Bloomberg News in June.

The company, which is investing more than 35 billion reais ($15.9 billion) in Brazil in the 2007-2014 period, is on track to start shipments from Minas-Rio on schedule in the second part of 2014 as it progresses with the project, Cutifani said yesterday. Anglo has obtained 98 percent of land and government approvals needed for the project, he said.

Physical works on Minas-Rio are 74 percent complete, the company also said yesterday in a press release. That compares with a 60 percent completion rate given by Anglo in April.

“We now have the project under control,” Cutifani said at the event. “We are very pleased with the progress.”

Anglo fell 1.8 percent to 1,545.50 pence at the close in London yesterday. The stock has dropped about 19 percent this year.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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