Miner Anglo American said this morning it would take a $4bn (£2.5bn) write down on its Minas-Rio iron ore project, as it increased its spending on the project.
Anglo American, which commissioned a review into Minas-Rio in November, said that investment in the iron ore project would jump to $8.8bn.
“On the basis of the revised capital expenditure requirements and its assessment of the full potential of phase one of the project, Anglo American will record an impairment charge of $4bn at 31 December 2012 on a post-tax basis,” the miner said in a statement.
Despite the difficulties, Anglo American is targeting the first ore on ship by the end of next year.
Chief executive Cynthia Carroll said this morning that she was “clearly disappointed” with the increase in capital expenditure and subsequent write-down.
“Despite the difficulties, we continue to be confident of the medium and long term attractiveness and strategic positioning of Minas-Rio and we remain committed to the project,” she added.