Brazilian mining company wins auction for west-east railroad concession
RIO DE JANEIRO, BRAZIL – Between the future port of the city of Ilhéus, on the coast of Bahia, and the iron mines of Caetité are 537 kilometers of an unfinished railroad, under construction since 2011 by the federal government.
For Bahia Mineração (Bamin), controlling this path was what was missing for the company to close a circle and ship the iron ore produced at the Pedra de Ferro mine to a port on its own, a strategic goal for the company.
The company, which owns the iron ore mines and is a partner of Bahia’s government in the Porto Sul project, won on Thursday, April 8, the National Agency for Land Transportation (ANTT) auction to finish and operate section 1 of the West-East Integration Railroad (FIOL).
Today, as the company is unable to ship its ore via the railroad and the port of Ilhéus, which are not ready, the company’s production is placed on the FCA railroad, which carries the ore towards the metropolitan region of Salvador.
Bamin, which has offices in Salvador, Ilhéus, Caitité, and Belo Horizonte, is part of the Eurasian Resources Group (ERG), one of the largest international mining companies and resource exploration groups in the world.
The only company that participated in the auction, Bamin now has the right to operate the railroad for 35 years. To this end, it offered R$32.7 million and should invest R$2.2 billion.
Of this total, R$1.6 billion (US$280 million) will be used to conclude the works, which are 80% complete. According to ANTT, the FIOL concession will allow for the creation of 55,000 direct and indirect jobs and income effects during the course of the concession.
It is expected that this stretch of the FIOL concession will start operating in 2025, transporting more than 18 million tons of cargo, including grains and, mainly, the iron ore produced in the Caetité region by Bamin.
According to ANTT, the volume should double in 10 years, exceeding 50 million tons in 2035.
Source: Exame
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