BHP Billiton, Ferrous, ArcelorMittal Lose Port Bids

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30 Jan 2009

Rio de Janeiro state, seeking to expand its iron-ore export capacity, approved about $8 billion of new terminal projects and rejected proposals by BHP Billiton Ltd., Ferrous Resources do Brasil Ltda. and an ArcelorMittal joint venture. The decision to reject some projects was made “on environmental, economic and social grounds,” because the proposals “were far off” from meeting the government’s specified targets, Rio Development Secretary Julio Bueno said today by telephone.
Twelve companies presented port projects for Sepetiba, a deepwater bay that is linked to Brazil’s main iron-ore producing region in Minas Gerais state by MRS Logistica SA’s railroad. In December, Bueno said that only projects generating revenue for the state and meeting set environmental guidelines in an area that’s important for tourism and fishing would proceed.
Petroleo Brasileiro SA, LLX Logistica SA, Cia. Siderurgica Nacional SA, Gerdau SA, Usinas Siderurgicas de Minas Gerais SA and Cia. Docas do Estado do Rio will be allowed to move forward with their projects and seek environmental licenses, Bueno said. The projects would add 250 million metric tons of annual iron- ore export capacity, Bueno said.
Brazore Ltda., the joint venture between ArcelorMittal, the world’s biggest steelmaker, and Canada’s Adriana Resources Inc., will review its strategy as a result of the state’s decision, said Guilherme de Andrade, the venture’s port development director.
“We haven’t altered any of our plans yet,” Andrade said today by telephone from Rio de Janeiro. “We’re still seeking mine assets in Minas Gerais state.”
Arcelor Joint Venture
Brazore had planned to set up a $750 million port terminal to export 45 million tons a year from the town of Mangaratiba on the bay. Half the ore would come from a mine ArcelorMittal purchased from London Mining Plc last year, with the rest coming from mines to be developed by Adriana Resources and other companies.
Sebastiao Ribeiro, head of BHP Billiton’s Brazil unit, declined to comment when contacted by Bloomberg News.
BHP purchased land last year in Mangaratiba to set up its proposed $900 million export terminal with 50 million tons of capacity.
Companies whose projects weren’t approved will be able to bid to use the 50 million-ton-per-year terminal being built by Docas, the federally owned ports development company, Bueno said. He said Docas will accept bids in the first half for its terminal at Itaguai on Sepetiba Bay.
Brazil exported 260.6 million tons of iron ore last year, according to the Web site of the Brazilian National Iron and Base Metals Association.
The new terminals will also be used to import coal and raw materials to develop Petrobras oil fields.
“The new Sepetiba port projects will practically double Brazil’s current iron-ore export capacity,” Bueno said. “This gives Brazil some new long-term market prospects.”

Source: Bloomberg