Anglo American PLC (AAUK) Friday said it has pushed back the full commissioning of the first phase of the Brazilian Minas-Rio iron ore project by between 12 and 15 months due to delays in obtaining environmental licenses and permits and delays in negotiations with landowners.

The company now expects first iron ore production in the second quarter of 2012. The planned annual capacity will be 26.5 million metric tons a year of iron ore pellet feed at an estimated cost of $3.6 billion. The cost is currently being updated following the announced delay.

The company experienced delays in obtaining environmental licenses and permits, particularly for the mine and benefaction plant. Negotiations took longer than expected with landowners which slowed progress on the pipeline, transmission line and access roads to the port.

The company, however, did get installation licenses for the port and pipeline and preliminary licenses for the mine and benefaction plant.

The company will focus the project's 2009 capital expenditure on the port and pipeline. The pre-feasibility study for the second phase of the Minas-Rio iorn ore project started in 2008.

Anglo American owns 99.4% of the Minas-Rio iron ore project and 69.2% of the Brazilian Amapa iron ore system and the 49% interest in LLX Minas-Rio.

Separately, Anglo American said that iron ore production at the Amapa system fell significantly below its expectations even though it was still in ramp-up phase. The Amapa system produced 1.2 million tons of iron ore in 2008 compared with a design capacity of 6.5 million tons of iron ore a year.

"Anglo American, together with its partner at Amapa, Cliffs Natural Resources Inc. (CLF), is studying all aspects of the mine and taking proactive steps to ensure that production is ramped up to design capacity," the company added.

 
   Company Web site: http://www.angloamerican.co.uk

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com