Anglo American to take near £300m hit following Brazilian leak
The mining group said it will take 90 days to allow it to undertake a full inspection.
Anglo American is set to take a profit hit of up to 400 million US dollars (£287 million) after the mining giant was forced to suspend production at its iron ore mine in Brazil because of a cracked pipe.
The group first halted production at the Minas-Rio mine in March after finding a leak in the pipeline that carries iron ore slurry to the port.
On Tuesday, Anglo said it will take 90 days to allow it to undertake a full inspection, including an internal scan of every section of the pipeline.
It will result in a 300 to 400 million US dollars reduction in 2018 earnings, Anglo confirmed.
Boss Mark Cutifani said: “Our priorities are to ensure the integrity of the pipeline and the protection of the natural environment, while providing as much clarity as we can for our employees, customers and other business stakeholders.
“Our own technical teams are working alongside two specialist teams in Brazil, from the Institute of Technological Research and the Federal University of Minas Gerais, to identify the specific causes of any weakness in certain sections of the pipeline.
“Following the full inspection, there will inevitably be a period of analysis and remedial work, prior to testing and restart of operations upon receipt of regulatory consent.”
Anglo also disclosed that production at Minas-Rio fell 30% to 3 million tonnes in the first quarter as a result of the leak.
The group as a whole saw production rise 4% on a copper equivalent basis compared with the same period last year.