JOHANNESBURG (miningweekly.com) – South Africa-created diversified miner Anglo American expects to have the capacity to produce more than 150-million tons of iron-ore a year from its South African and Brazilian iron-ore operations by 2016, analysts have been told.

Mining Weekly Online can report, too, that Anglo, headed by CEO Cynthia Carroll, is setting up a single operation to market its South African and Brazilian iron-ore, in anticipation of what are expected to be large future iron-ore trading volumes.

"A whole bunch of analysts went to Minas-Rio," Mining Weekly Online was told.

Those analysts, it is understood, were informed that Anglo's iron-ore projects which are currently in implementation, and those approved, have the capacity to provide an output of 80-million tons a year, but that, together with conceptual projects, there is the potential virtually to double that to beyond 150-million tons a year mark by 2016.

The projects being implemented are the Sishen expansion project (SEP) in South Africa and the Amapa project in Brazil; the approved projects are Sishen South, which is going full-steam ahead, and Minas-Rio; and the conceptual projects include the SEP 2 project and the Minas-Rio and the Amapa expansion projects.

Brazil is poised to become the location for 60% of potential production.

The projects are setting Anglo up to entrench itself as the fourth-largest producer of iron-ore, ahead of FMG of Australia, and "significanlty" to narrow the gap between itself and the big three of Vale of Brazil and Rio Tinto and BHP Billiton of Australia.

South Africa's Kumba Iron Ore is currently slightly ahead of FMG, but only ever so slightly.

With the $6-billion investment from China having fallen through, FMG's pace of growth is expected tp slow.

Iron-ore prices have increased by 369% between 2003 and 2008 and the benchmark pricing system is under pressure.

The spot market is active and there is a gradual move towards index pricing.

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