Anglo American said this week it expects a reduced EBITDA this year due to incidents at two slurry pipelines at its Minas-Rio iron ore project in Brazil.
Despite saying the company is “progressing with a full inspection of its pipeline,” the March 12 and March 29 incidents will result in a $300-400 million reduction in the company’s EBITDA for 2018. Anglo did not provide an estimate for the total EBITDA the group should report worldwide by the end of the year.
The full inspection at the burst pipeline will take about 90 days to complete. “The inspection includes an internal scan of every section of the pipeline and will then be followed by a detailed analysis of the data and an assessment of required remedial action,” the company said.
“Mining operations will then resume once any repair work is completed, the pipeline has been tested and the regulatory authorities have provided their consent to the resumption of pipeline operations,” the company noted.
Anglo American’s CEO, Mark Cutifani, said the company is working with local unions to agree on the “appropriate terms” for a third of the company’s employees at Minas-Rio to go on an extended period of leave.
“The majority of our Minas-Rio employees continue to be deployed across our operations in Brazil, including on the construction work required to secure our Step 3 operating license in the first half of 2019 to enable the full ramp-up of Minas-Rio to 26.5 million mt per year," Cutifani said.