May 17, 2022

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The new player in the Brazilian mining sector under the microscope

Brazilian energy and logistics conglomerate kosan She mentioned that she is in the process of entering mining sector Through a joint venture focused on iron ore.

“For Cosan, it’s about diversifying the business and it won’t change activity in the iron ore sector,” equity analyst Pedro Galdi of Mirae Asset Wealth Management told BNamericas. He is aware of his moves because he has a lot of money and the ability to increase investments in the sector very quickly if he wants to.”

With its operations in ethanol, sugar, biofuels, electric power and multiple investments in the logistics sector, Cosan has announced the creation of JV Mineração, which will be a mining and logistics company that will have port and exploration rights for assets in three iron ore projects in the state of Pará.

JV Mineração belongs to Cosan and Paulo Brito, founder and controlling shareholder of the gold and copper producer Aura minerals. The joint venture has nothing to do with Aura operations.

With production focused mainly on iron ore, copper and nickel, Bara is the most important mining state in the country. Where is the Brazilian company? Valley It operates Carajás, the largest iron mine in the world.

Our goal is to start by 2025 or 2026 with a production capacity of 10 million tons [Mt] of iron ore per year, Juarez de Avillar, CEO of JV Mineração, said in a virtual conference with analysts and journalists.

“By the end of the decade, we are aiming for a significant increase in this. We will produce iron ore of the highest quality, close to Valley ore,” he said.

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For comparison, Vale plans to mine up to 335Mt of commodity this year.

According to the Executive, the economic viability of JV Mineração begins when the metal is trading at $60/ton.

port project

As part of its entry into the mining sector, JV Mineração said it had acquired 49% of the future port of São Luis, in a deal worth R$720 million (US$135 million). The stake is owned by WTorre and Lyon Capital.

The remaining 51%, which can be acquired by JV Mineração, is owned by China Communications Construction Company (CCCC).

“We are in talks with the CCCC to buy all the shares in the port of São Luis,” Marcelo Martins, Cosan’s chief financial officer, said at the event.

Construction of the port of São Luis is expected to resume once talks with Consolidated Contractors are concluded. The port can handle 50 million tons per year.

Julio Fontana, logistics consultant for JV Mineração, said during the online conference.

The executives also indicated that there are plans to run the port 100% on renewable energy.