Anglo American's unit Kumba Iron Ore has started phase one of relocating the Dingleton community in Northern Cape, South Africa, as part of its plan to expand production to 37 million tonnes by 2016.
The ZAR4.2bn ($383.3m) relocation project is an important element of Anglo American's South African iron ore business under which, Sishen Mine will be expanded in the western side.
For this first phase, the company has started relocating 500 houses, with the first households moving into Kathu, Northern Cape province.
Seventeen private home owners and the occupants of 54 municipal houses from the Dingleton's northern section will be relocated by December, followed by the remaining properties by the end of 2016.
The relocation follows completion of an extensive consultation process with the community and other stakeholders and is being carried out in accordance with the Anglo American Social Way and the International Finance's sustainable performance standards.
Currently, the Dingleton community is separated from the mine by a 500m buffer zone.
Kumba public affairs executive head Yvonne Mfolo said: "We are dealing with people and their homes and will approach any challenges with sensitivity and empathy."
Located 30km away from the town of Kathu, the Sishen mine is one of the largest open pit mines producing iron ore in the world and accounts for the majority of Kumba's iron ore production.
Sishen mine is estimated to have an operational life of 18 years and expansion projects, including Sishen lower grade, SEP1B and the Sishen DMS concentrate projects, which are being considered to extend the life of the mine.