Ferrous Resources Ltd., the iron-ore miner backed by billionaire Philip Falcone’s Harbinger Capital partners LLC, appointed Jayme Nicolato Correa as chief executive officer, a person familiar with the situation said.
Nicolato Correa, who until last year was mining director at Brazilian steelmaker Cia. Siderurgica Nacional SA, will replace Mozart Litwinski, the person said, declining to be named because there was no public announcement by the company yet. Ferrous declined to comment, according to an official at an external public relations firm working for the company in Brazil.
Ferrous is competing with miners including Anglo American Plc and MMX Mineracao & Metalicos SA in expanding iron-ore projects in Brazil, the world’s second-largest exporter of the steelmaking ingredient, to meet rising Chinese demand. The Belo Horizonte-based company produced its first ore last year and agreed on shipment contracts with companies including Glencore International Plc and Noble Group Ltd.
Litwinski resigned to dedicate more time to his family and personal business, Ferrous said in a statement Jan. 19.
Ferrous is looking for a strategic partner to help finance its projects since at least 2009, having shelved plans in June 2010 for a $400 million initial public offering in London because of volatile equity markets. BHP Billiton Ltd., the world’s largest mining company, held talks to potentially take over Ferrous last year, two people with knowledge of the negotiations said in October.
In December, Ferrous proposed a $2.3 billion takeover of rival MMX, the Rio de Janeiro-based iron-ore producer controlled by Brazilian billionaire Eike Batista, according to a letter detailing the plan obtained by Bloomberg News. Ferrous holders would own 53 percent of the combined company, with MMX owners having the rest, according to the Dec. 19 proposal, signed by Ferrous shareholders and addressed to MMX’s board.
The companies held “several discussions” on a merger over the past 18 months, the letter shows. A response to the letter was requested by Jan. 10. MMX said in a statement Jan. 19 that it’s not interested in a merger with Ferrous.
New York-based hedge fund Harbinger, founded by Falcone, held more than 26 percent of Ferrous as of March. The stake, along with other holdings, is being used by the fund as collateral for a $190 million loan from Jefferies Group Inc., from which Harbinger is paying a 15 percent interest rate, two people with knowledge of the loan said this month, asking not to be named because the fund is private.
Harbinger’s main hedge fund lost 47 percent last year.
Ferrous expects to produce as much as 4 million metric tons of the steelmaking raw-material this year, up from 1.8 million metric tons in 2011, Chief Financial Officer Andre Simao said Jan. 30. The company sold five iron-ore shipments totaling 750,000 metric tons to Hong Kong-based Noble, Asia’s biggest commodity supplier, he said.
The company is ramping up iron-ore production at its mines in Brazil’s southeastern state of Minas Gerais, including the Viga and Esperanca assets. It plans to build a pipeline to link the mines with a port terminal in the Espirito Santo state.
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