18/12/08

Multinational resource group Anglo American (LSE: AAL) reported it is postponing by eight months the commissioning of an expansion at its Los Bronces copper mine in Chile, with first production now expected in the fourth quarter of 2011.

The US$1.74bn expansion, kicked off in late 2007, aims to increase output to roughly 400,000t/y of fine copper. The mine produced 231,216t last year.

But despite the delay, Anglo American still aims to spend US$400mn-500mn on the expansion project in 2009 following reductions to the group`s global spending portfolio for next year, according to a company spokesperson.

On Wednesday, Anglo American revealed the outcome of a revision of its global spending, which involved slashing its 2009 capex by more than 50% to US$4.5bn, including a reduction in base metals expenditures to US$1.3bn.

Aside from the delay at Los Bronces, the company did not announce any postponements for copper assets, but did push back by 12 months the commissioning of the first nickel output at the Barro Alto operation in Brazil.

In iron ore, Anglo American delayed by 6-12 months the commissioning of the Minas-Rio project in Brazil, now expected to start producing in late 2011 or early 2012.

“We have taken decisive action as a result of the fast changing economic climate and have undertaken a thorough reevaluation of our stay-in-business and development requirements,” Anglo American CEO Cynthia Carroll said in a company statement issued Wednesday.

“We have made significant adjustments to prioritize the expenditure in those areas where we expect relative outperformance in the near term while maintaining a high degree of flexibility for our future growth,” she added.

In the third quarter the company churned out 148,600t copper, 86,500t zinc, 10.1Mt iron ore, 5,600t nickel and 3.07Mt of South American thermal coal.Pablo GaeteBusiness News Americas

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