Bloomberg reported that Anglo American Plc, which last month started iron ore shipments from the Minas Rio project in Brazil, expects the USD 8.8 billion venture to be profitable even as the steel making ingredient trades near five year lows.

Mr Paulo Castellari, CEO of Anglo’s iron ore unit in Brazil said that “Minas Rio, Anglo’s largest project, has low production costs that allow it to withstand a decline in iron ore prices. While the company will take time to recover the investment, the project will be a big cash generator for Anglo.”

Mr Castellari said that “With prices going up or down, we will continue generating value, generating profits. We are very well positioned in the market as a whole. There are other producers with much higher costs.”

Mr Castellari said that “The venture has an operating cost of USD 33 to USD 35 a so called wet ton before shipping expenses. The company targets production of 11 million to 14 million tons next year. Iron ore continues to be a very important commodity for the development of this world. We will have a difficult period for prices in the next year. We don’t see any chance of hitting the levels of two years ago.”

On Oct. 25, Anglo shipped a cargo with more than 80,000 tonnes from the Acu port in Rio de Janeiro to customers in China, marking the start of the Minas Rio project about four years later than initially scheduled. The project’s start, which faced delays and cost overruns since it was bought in 2008, coincides with a slump in iron ore prices as Australian and Brazilian producers expand capacity and demand from China, the biggest user, stalls.

Minas Rio includes a mine, processing plant and a 529 kilometer pipeline to carry slurry to a dedicated iron ore terminal at the Acu Port in Rio state.

Anglo, based in London, boosted the cost of developing Minas Rio to USD 8.8 billion from an original estimate of USD 2.6 billion after facing permit delays and project design changes. It wrote down USD 4 billion of the asset’s value in 2013.