Rio Tinto 'should move HQ to Australia'

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Anglo American (LSE: AAL.L - news) could write down the value of its Minas-Rio Brazilian iron ore venture by between $4bn and $5bn.

Troubled miner Anglo American may write down the value of its iron ore project in Brazil by as much as $5bn (£3.2bn), after mismanagement of the project led to a rapid increase in costs.

The Minas-Rio mine is one of Anglo’s most important growth projects, but the expected cost has been revised higher several times. It has increased from an initial estimate of $3.6bn to about $8bn.

Anglo will reportedly slash the value of the mine by $5bn, possibly as soon as this week, before it issues full year numbers on February 15.

Cynthia Carroll was forced to resign as Anglo’s chief executive in October when details of the latest cost overrun emerged. It is widely believed that her failure to get a grip on costs at the project is the main reason for her departure.

Minas-Rio was bought by Ms Carroll for $6bn in 2008 from Brazilian billionaire Eike Batista’s MMX. Getting the project on track will top the agenda of Mark Cutifani, the new chief executive who was appointed at the start of January, as well as implementing the group’s review of its platinum business.

Meanwhile, Gina Rinehart, the Australian mining billionaire, has urged Sam Walsh, Rio Tinto’s new chief executive, to abandon London and move its headquarters to Australia, arguing that is where it “logically belongs” because it is where Rio makes most of its profit. Tom Albanese resigned as Rio’s chief executive last week after writing down $14bn of assets.