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By Alexandra Alper and Saeed Azhar
RIO DE JANEIRO / DUBAI (Reuters) – Anglo American has suspended a contract to supply iron ore with the Bahrain Steel customer, according to the Middle East firm, in its latest headache with the Minas-Rio system, which Iron ore product in Minas Gerais, after leaks were recorded in the pipeline that brings his goods to the port for export.
The contract with Bahrain Steel is about $ 1 billion a year, according to Reuters calculations based on Anglo 's average prices at its Minas Rio mine last year.
Bahrain Steel, which produces iron ore pellets for steelmakers, said the miner declared force majeure in April in his 20-year deal and is expected to deliver 13 million tonnes of iron ore a year.
Anglo froze Minas Rio system operations in March following the discovery of two leaks in the pipeline that transports its iron ore to an export terminal off Rio de Janeiro.
The suspension of the contract with Bahrain underscores the seriousness of Anglo 's problems with the project, bought at the height of the commodities boom a decade ago, for $ 5.5 billion.
However, Bahrain Steel has ruled out a serious impact on its own operations.
"We effectively guarantee and diversify our sources of raw materials, ensuring the continuity of our production and our ability to meet the needs of our customers," said Bahrain Steel, which belongs to Foulath, an investment vehicle focused on In the Middle East.
Anglo said that he would not comment.
(Additional report by Manolo Serapio in Manila, Marta Nogueira in Rio de Janeiro and Barbara Lewis in London)
Copyright Thomson Reuters 2018
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