Warns about delays and higher costs at its key iron ore project.

LONDON (Reuters) - Miner Anglo American (JSE:AGL) reinstated dividends but warned about delays and higher costs at its key iron ore project in Brazil after first-half profit doubled on higher prices.

The group, the world's fourth-biggest iron ore producer, said its Minas Rio project in Brazil would not start producing in 2012 as planned.

"A number of key approvals remain outstanding and these are on the critical path of the project, therefore impacting the time and cost to complete," the company said.

Anglo, which has secured 23 out of 33 licences for the project, would be able to start the project at the earliest by 2013, Chief Executive Cynthia Carroll told a conference call.

Anglo concluded deals in 2007 and 2008 to pay a total of $6.65 billion for Minas Rio and 69 percent of Amapa, another Brazilian iron ore mine.

Carroll also said the firm had completed an internal study about adding a joint venture partner to the project, but would only move to seal a deal when the time was right.

The group was being approached "on a continuous basis" by possible partners, she added.

Anglo said underlying earnings per share increased to $1.84 from 91 cents last year. This was higher than a consensus of $1.73, based on 12 analysts' estimates gathered by the company.

It announced a half-year dividend of 25 cents per share after suspending payouts last year to conserve cash during the global downturn that hit metals demand and prices.

"I am pleased to announce the resumption of dividend payments... reflecting the group's improved operating performance and financial position, as well as progress on non-core asset sales and a supportive medium term outlook," Carroll said in a statement.

Anglo is the second major diversified mining group to issue results after Brazil's Vale posted a more than fourfold increase in second quarter profit on Thursday on high iron ore prices.

Miners have all benefited from a rebound in metals prices over the past 12 months following a crash during the global downturn when demand withered.

The average price of copper during the first half quarter was 75 percent higher than the same period a year ago while nickel was up 80 percent.

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