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NEWS-LEADING DEVELOPMENTS Anglo American, Barrick and Kinross Report Major Asset Impairments In their reports of financial results for 2012, Anglo American, Barrick and Kinross each recorded asset impairments exceeding $3 billion. In each case, the impairments were made against the value of a major development project or operation that has not lived up to expectations— Minas-Rio in Brazil for Anglo American, Lumwana in Zambia for Barrick, and Tasiast in Mauritania for Kinross. Anglo American: Anglo American announced on January 29 that following a review of capital expenditure requirements for its Minas-Rio iron ore project in Brazil, it would record an impairment charge of $4 billion against the project on a post-tax basis as of December 31, 2012. Capital expenditure for Minas-Rio development is projected to increase to $8.8 billion, up from an earlier estimate of $5.8 billion. Anglo American acquired the project in two installments in 2007 and 2008 for $4.8 billion. The announcement said that, despite the challenges the Minas-Rio project has faced, the company is targeting first ore shipments from the project by the end of 2014. The project is being developed to produce 26.5 million mt/y of iron ore pellet feed. Anglo American's recently announced $4-billion writeoff for its Minas-Rio iron ore project is seen by some observers as a move to 'clear the decks' for incoming CEO Mark Cutifani, pictured here. 4 E&MJ; • MARCH 2013 A forecast for lower profitability at its Lumwana copper mine in Zambia prompted Barrick to announce a $3billion impairment charge for the open-pit operation in its fourth-quarter and full-year 2012 financial results. In mid-February, Anglo American announced a current probable ore reserve of 1.45 billion run-of-mine mt for the Serra do Sapo area of the Minas-Rio project, equivalent to 685 million mt of saleable product at an average grade of 67.5% iron. The probable ore reserve represents a partial conversion of material previously classified as resources. The project's resource total currently stands at 4.27 billion mt grading 32.22% iron. Following one-off impairments, Anglo American reported a full-year 2012 loss attributable to equity shareholders of $1.5 billion. Barrick: In its report of fourth-quarter and full-year 2012 financial results, released February 14, Barrick recorded a fourthquarter after-tax asset impairment charge of $3 billion for its 100%-owned Lumwana open-pit copper mine in Zambia. The company also recorded a goodwill impairment of $0.8 billion for its copper business unit for a total charge of $3.8 billion. Barrick acquired Lumwana in 2011 when it acquired Equinox Minerals for approximately C$7.3 billion. Barrick's 2013 production guidance for Lumwana is 210 million to 250 million lb of cop- per in concentrates at C1 cash costs of $2.70 to $3.10/lb and C3 fully allocated costs of $3.20 to $3.60/lb. The Lumwana impairment results from revised life-of-mine cost estimates under current copper price assumptions, reduced expected copper production, and, in turn, reduced profitability over the mine life. "We continue to progress a number of key initiatives to lower costs, including improvements to operating systems and processes, and a full transition to an owner-maintained operation. A focus on higher utilization and productivity of the mining fleet has also been identified as one of the major opportunities to improve value. Until we can improve mining costs, and/or copper prices increase, the expansion opportunity to increase the throughput capacity of the processing plant does not meet our investment criteria," the Barrick statement said. For full-year 2012, Barrick reported a net loss of $0.67 billion, including aftertax impairment charges of $4.4 billion. Kinross: In its report of fourth-quarter and full-year 2012 financial results, released February 13, Kinross reported www.e-mj.com