(Reuters) - Anglo American Plc said on Tuesday it would halt production and transport of iron ore for 90 days from its Minas-Rio mine in Brazil to inspect a pipeline that has leaked twice, complying with authorities’ demands for the review.
Anglo froze operations at the mine in Minas Gerias state after the leak was discovered on March 29 in a pipeline which carries iron ore in slurry to an export terminal in coastal Rio de Janeiro.
The incident came just weeks after another leak in a different section of the same pipeline prompted Anglo to suspend operations at the mine from March 12-27, raising fresh questions about mining oversight in Brazil.
Ruben Fernandes, Anglo’s chief in Brazil, said the company estimated the total cost of repair, including environmental and social costs, to be about 60 million reais ($17.96 million), excluding lost revenue from exports.
“Obviously, the loss of revenue will be more than that because we will stop shipments for the next few months,” he said at an event in Sao Paulo without offering a figure.
Fernandes said Anglo was already negotiating with customers to reschedule shipments since iron ore stocks were running low.
Environmental regulator Ibama mandated that the company inspect the pipeline, which the company said should take about 90 days.
Anglo said the leak of non-hazardous iron ore slurry was stopped within eight minutes and caused no disruption to local water supply and no injuries.
($1 = 3.3409 reais)
Reporting by Arathy S Nair in Bengaluru and Roberto Samora in Sao Paulo; Writing by Alexandra Alper; editing by Jason Neely and Lisa Shumaker