Anglo American (LSE: AAL) — the multinational mining company and the world’s largest producer of platinum — announced this morning the the first ore on ship (FOOS) from its Minas-Rio iron ore project in Brazil, saying that it had come in within the targetted budget. Anglo American’s share price opened slightly up, but has since fallen back to stand 0.4% down on the day so far.
The company said that its first cargo from Minas-Rio — more than 80,000 tonnes of iron ore, destined for the pellet feed market — was loaded onto a chartered vessel at the Açu export terminal in Rio de Janeiro state and that the ship is now heading to customers in China.
The CEO of Anglo American’s Iron Ore Brazil operations, Paulo Castellari, said that the company is now focused on achieving a safe ramp-up to a capacity of 26.5m tonnes per year over the next 18-20 months. It will also have to concentrate on the regular cycle of licence and permit renewal that the move to operational mode will require.
Commenting on the news, CEO Mark Cutifani said
“Delivering FOOS from Minas-Rio is a remarkable achievement from our team and is one of our three major commitments to our shareholders this year. Minas-Rio has an exceptional resource in terms of scale and ore quality, producing some of the highest quality pellet feed available for our customers across the Middle East and Asia, providing us with a clear competitive advantage. We believe that the outlook for our particular premium product remains attractive, despite the current weakness in the iron ore price, and that the fully integrated operation of Minas-Rio – from mine to port – will enable us to sustain our low operating cost position over the long term.“
At 1,303p, Anglo American’s share price is down 13% on this time last year, compared with a 5% fall in the FTSE 100 index. And the longer-term story makes for even less happy reading, with Anglo American down 45% over the past five years, during which time the FTSE 100 has risen 22%.
