Dec. 19 (Bloomberg) -- Anglo American Plc is boosting its stake in a Brazilian port venture as it prepares to start the $8.8 billion Minas-Rio iron-ore project, the company’s biggest.
Anglo is raising its share of the LLX Minas Rio venture that will ship ore from Minas-Rio to 50 percent from 49 percent, said Eugenio Figueiredo, acting chief executive officer of partner Prumo Logistica SA. He declined to say how much the London-based company will pay for the further 1 percent. Anglo confirmed the stake increase in an e-mailed response to questions.
“Anglo will inject some money in the venture,” Figueiredo told reporters in Rio today after meeting investors. “The joint venture will increase the number of shares and Anglo will subscribe to have equal stakes.”
Anglo plans to start production at the 26.5 million metric-ton-a-year Minas-Rio project in the second half of 2014 after missed targets and cost overruns is leading it to write off $4 billion from the project’s value. Works at the venture are 82 percent complete, Anglo said in a separate statement today, adding that the iron-ore terminal at Rio’s Acu port is 73 percent done.
The stake increase by Anglo won’t alter the governance of the venture because both companies were sharing decisions, Figueiredo also said. The deal is likely to be completed during the first quarter of 2014, he said.
Anglo rose 0.4 percent to close at 1,283 pence in London. The stock has dropped 32 percent this year. Prumo advanced 7.3 percent to 1.17 reais in Sao Paulo, the highest since Nov. 18.
Prumo, formerly known as LLX Logistica SA, was founded by former billionaire Eike Batista to develop port and logistics projects in Brazil. EIG Global Energy Partners LLC, the energy and infrastructure private-equity fund with $16.1 billion under management, took control of the company in October as Batista attempted to salvage his crumbling commodities empire.
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