Global mining major Anglo American’s Brazilian iron-ore subsidiary, Anglo Ferrous Brazil, expects world demand for iron-ore to return to normal within two years, and is planning to dramatically increase its production over the next six years, markets permitting.
 Currently, Anglo Ferrous Brazil pro-duces just three-million tons of iron-ore from its mine in the Brazilian state of Amapá. However, this will be increased to 4,5-million tons by late next year and to 6,5-million tons by 2013.

Even so, the $1,5-billion Amapá operation will be massively overshadowed by the company’s $3,5-billion Minas-Rio complex, which is not yet operational but is expected to start production in 2012 and achieve an output of 26,5-million tons in that year. 
Anglo Ferrous Brazil president Stephan Weber has revealed that the company intends to increase this to 80-million tons by 2015. 
“Our ore, by geological chance, has almost no impurities, [and] is more than 68% pure.” 
Anglo Ferrous Brazil owns 69,2% of the Amapá operation and 99,4% of the Minas-Rio project.

Nevertheless, Weber has warned the Brazilian government that it risks “shooting itself in the foot” if it implements a proposal to increase the royalties imposed on iron-ore-mining.

Currently, these are set at 2%. 
“Today, Brazil is not as competitive because the tax burden is very high,” he told the Reuters news agency. 
“In Australia, the royalties are [higher] than here, yes, but there they don’t have so many taxes. 
“People have to remember that we are competing with the world.”

At the moment, the company is supplying iron-ore to markets in Europe and the Middle East. 
“We have sold some things to China but the freight is not very competitive,” he reports. China is the single biggest market for iron-ore.
 The problem is that all its current production from the Amapá operation is exported through the Port of Santana, 
also in Amapá, which can only accommodate ships of up to 40 000 t, which denies the company the economies of scale it needs to properly enter the Chinese market. 
Brazilian and world number one 
iron-ore producer Vale is already using very large ore carriers of 350 000 t to carry its ore to China. 
Consequently, Anglo Ferrous Brazil is considering exporting its Amapá production through a port in the next-door state of Pará, which can take ships of up to 
150 000-t capacity. 
Competitive export of the iron-ore that will be produced by the Minas-Rio complex will not be a problem, as this will go through a new terminal on the coast of Rio de Janeiro state.

The company has identified what Weber calls “second and third level” companies as its target market in China – that is, the smaller Chinese steelworks.
“They will only order a ship every 
three months, but the advantage is that there are many of those small companies
 in China and we can sign long-term con-tracts. 
“The long-term market is our target. We do not want to play in the spot [market] – the benchmark [price] is the road which Anglo American chose.”
Regarding competition in the Chinese market, he says: “Our fight is not with Vale; it is with the Australians.”

Anglo Ferrous Brazil was created through the acquisition of assets from Brazilian iron-ore-
mining company MMX. 
These assets were the Amapá and the Minas-Rio iron-ore projects. 
The Minas-Rio project is so designated because the iron-ore will be mined in Minas Gerais state and exported from Rio de Janeiro state. (MMX retained two other iron-ore operations, or systems, as it calls them.)

Anglo American also owns South African iron-ore-miner Kumba, with a 63,4% share.

source : miningweekly.com

Find More Other News : Iron Ore, Mineral Exploration, mining companies