ERG mulling offers for Brazil iron ore project
me-metals: Eurasian Resources Group is in talks with three different investors interested in its Brazilian iron ore project Bahia Mineração.
According to me-metals cited from mining.com, The project, known as Bamin, includes an iron ore mine, a future deep sea port and a rail link. ERG is analyzing the non-binding offers and is seeking to present a new investor to Brazil’s government by the end of the first quarter of next year, Bamin chief executive officer Eduardo Ledsham said on the sidelines of a conference in Salvador, Brazil on Monday.
Ledsham declined to identify the bidders, but said they include international and national players with appetite for building and managing mining and logistics assets. Bloomberg in March reported that Brazil Iron Ltd. offered about $1 billion to buy the project. Vale SA — which in August said it was weighing an investment — hasn’t yet completed its assessment of the project, the iron ore giant’s CEO, Gustavo Pimenta, said at the conference.
Any deal would require government approval since it involves a railway concession, and there’s no decision on whether ERG would continue as minority holder in the project, according to Ledsham.
The project still needs a roughly $5.7 billion investment to expand mining operations, build the port and finish a 537-kilometer (334-mile) stretch of railway linking the two, according to Ledsham. The mine — which halted operations in January because it needs more investment — may produce up to 26 million tons a year of high-grade iron ore once fully operational.
The first shipment will probably be postponed from 2027 to the last quarter of 2031 as investment is needed, Ledsham said. Brazil’s transport ministry would have to approve the new deadline for the conclusion of the railway section. Bamin suspended the rail works in March, saying it was seeking a new capital structure for the project.
Ledsham said Brazil’s development bank, known as BNDES, could still consider financing the project. The country sees the railway section as a top priority since it cuts through many municipalities in Bahia state and would be able to handle cargo for industries including agriculture and mining.
ERG is one of the world’s largest producers of cobalt and chrome. The company has faced difficulties in moving forward with Bamin in the wake of Russia’s war with Ukraine, as the main financial institution in the project’s banking pool was Russian, Ledsham said.
source: mining.com
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