April 13, 2012 / 8:51 PM / 8 years ago

Brazil historic site could trip up big Anglo mine

* Court rules against opening of the mine

* Separate action suspends licence for transmission line

* Anglo says obstacles not affecting project timetable

By Sabrina Lorenzi

RIO DE JANEIRO, April 13 (Reuters) - Anglo American’s plans to open its largest ever iron ore mine have stumbled over new rulings that will delay preparations to build the mine until it is deemed safe for an archaeological site within its perimeter.

The company is prohibited from undertaking new works at the site of the $5.7 billion project such as clearing vegetation, excavating and removing soil for the opening of the mine. The company had planned to begin that work this month.

The prosecution service of Minas Gerais state says Anglo American’s project is destroying the region’s archaeological heritage and violating the law while the national heritage organization Iphan has yet to approve the project.

Anglo has failed to meet conditions imposed on its mining license for its project, according to the prosecution, so work has been suspended “until the full execution and completion of archaeological surveys ... and Iphan’s express approval.”

The mining company can continue to work on pumping stations, a dam and a tailings dam, provided they are not deemed damaging by Iphan, according to the Minas Gerais court.

Also allowed to proceed are construction of a 525 km (328 mile) mineral duct that would carry ore from the mine to a Rio de Janeiro port.

The Minas-Rio duct was acquired from the mining unit of the EBX conglomerate owned by Brazilian billionaire Eike Batista.

Anglo has partnerships with Batista’s LLX, a logistics company, and with an iron ore terminal at the Port of Acu in the north of Rio de Janeiro state, through which it plans to ship production that could reach 90 million tonnes per year.

That would be roughly a quarter of Brazil’s total present iron ore output.

In a further setback, a license to install a power line to supply the project has also been suspended. Anglo has the option of appealing the ruling.

Anglo says its timetable for the project is unchanged and it will start operations in the second half of 2013. The company plans to invest $2 billion in the project this year.

“The company believes that the Minas-Rio project does not put at risk the artistic and cultural heritage of Conceição do Mato Dentro and Dom Joaquim,” the company said in an email in response to questions.

“Anglo American carries out archaeological monitoring at all stages of the project and sends bi-monthly reports to the relevant government agencies,” the company said.

Calls to Iphan about the archaeological value of the site were not returned by the time of publication. (Writing by Peter Murphy; Editing by David Gregorio)

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