Anglo American has secured a US$644-million (1.4-billion reais) loan from the Brazilian Development Bank to help fund its nickel production in Brazil.

The financing from the Brazilian bank represents 46.4 percent of the total $1.42-billion (3.1-billion reais) investment Anglo American is making in Barro Alto nickel project in the central state of Goias.

Chinese news service Xinhua reported on Tuesday that the financing would be used for the expansion of nickel production and in the construction of a processing centre at Barro Alto.

The centre will p rocess 36 000 tons of nickel a year and is expected to be in operation in 2010.

Dow Jones Newswires said the loans provided by the Brazilian Development Bank are attractive because the bank offers lower interest rates than local private banks.

The bank's loans are calculated in accordance with the government's long-term interest rate, which is currently 6.25 percent plus an average spread of two percent.

Commercial loans typically come with a spread over the benchmark Selic base rate, which is currently at 13.75 percent.

Earlier this year, Anglo American acquired control of two Brazilian iron ore projects from Brazil's MMX Mineracao e Metalicos.

Both iron ore and nickel are used in the production of stainless steel.

The world's nickel production stands at around 1.5 million tons per year, which makes Brazil the seventh largest nickel producer in the world with an annual production of 37 000 tons.

I-Net Bridge