Anglo American, the mining conglomerate that is being stalked by Xstrata, its Swiss-based rival, is in talks with Dubai Natural Resources World to co-develop iron ore assets in Brazil.

The discussions with the Gulf company, owned by the Emirate of Dubai, come after separate talks with other potential investors, including Chinalco, the Chinese state-owned metals group, although these are not expected to result in a deal.

Anglo needs cash to bring its Brazilian iron ore reserves into production and an injection of capital from an outside investor might help it to fend off Xstrata’s unwelcome merger proposal. Anglo believes that it needs $3.6 billion (£2.1 billion) to develop the Brazilian iron ore. It spent $5.5 billion buying MMX-Minas Rio assets 18 months ago and a sale of part of its stake in MMX is being considered to raise the money needed to begin production.

The miner has been forced to slash its capital expenditure budget by $4.5 billion this year and to lay off 19,000 workers because of the downturn in commodity markets.

Some shareholders have said that the acquisition of MMX is one of the reasons that they have lost confidence in Cynthia Carroll, the chief executive. She is accused of paying too much for MMX. However, if another investor bought into the project at a similar level it could vindicate her decision.

Dubai Natural Resources World, Anglo’s potential partner, was set up last year to create a portfolio of investments in the oil, gas, agriculture, alternative energy and mining sectors. It is a division of Dubai World, the state-owned conglomerate that holds much of Dubai’s wealth. Dubai World bought P&O Ports for £3.9 billion three years ago and has a large stake in MGM Mirage, the Las Vegas hotel group.

Anglo’s future has been under the spotlight since Xstrata wrote to its board two weeks ago to propose a merger of equals. Anglo rejected the approach but has still to convince shareholders that it is better off as an independent company.

Part of the challenge will be to find a chairman who will give investors confidence. With Sir Mark MoodyStuart due to step down next year, the company is understood to have a shortlist of three replacements.

These include Sir John Parker, the chairman of National Grid, and Jim Leng, briefly chairman-designate of Rio Tinto until he fell out with the miner’s management over a proposed deal with Chinalco. An announcement is likely this autumn. Anglo declined to comment yesterday.

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