BRASILIA, Nov 23, 2011 (Dow Jones) -- Miner Anglo American PLC (AAL) is "very positive" on the fundamentals of the iron ore industry, with demand for the steelmaking material to increase as much as 39% over the 2010-2020 period, Brazil-based directors of the mining company said Wednesday.

Annual world iron ore demand is set to grow an average of 3.4% a year between 2010 and 2020, mainly driven by Chinese steelmaking growth, Paulo Castellari, commercial director of Anglo's Brazilian iron ore unit told reporters in Brasilia.

Anglo will "significantly enhance" its presence in the global iron ore market when it brings its $5 billion Minas-Rio iron ore project in Brazil into production in second half 2013 with a capacity of 26.5 million tons a year of iron ore, the unit's CEO Stephan Weber said.

The company is already undertaking a prefeasibility study on a possible expansion of Minas-Rio, Weber said.

The project has iron ore resources of 5.3 billion tons of ore and the potential to expand up to a production of 80 million tons a year of iron ore, Weber said.

However the decision on an expansion may still be "a few years off" Weber said. Last year Anglo produced about 43 million tons of iron ore at its Kumba mine in South Africa, whose potential output is 60 million tons a year, and 4 million tons at its Amapa mine in north Brazil.