Trafigura Beheer BV and Mubadala Development Co. completed the purchase of a stake in Eike Batista’s Sudeste port in Brazil for $400 million, gaining a foothold in the second-largest iron-ore exporting country.
Trafigura and Abu Dhabi’s Mubadala sovereign wealth fund also assumed about 1.3 billion reais ($558 million) in debt to gain 65 percent of the project, Batista’s MMX Mineracao & Metalicos mining unit said in a statement today. The deal concludes more than five months of exclusive negotiations since a preliminary agreement to buy the terminal in Rio de Janeiro state’s Itaguai harbour was announced on Sept. 10.
The port will provide Amsterdam-based Trafigura, the world’s biggest metals trader after Glencore Xstrata Plc, with an export platform for iron ore mined in landlocked Minas Gerais state and bound for Asia and Europe. MMX said in June it was holding talks with possible suitors including Trafigura and Glencore.
“It was a unique opportunity,” Mariano Marcondes Ferraz, chief executive officer of Trafigura’s DT Group venture and a board member at Sudeste, said in an interview in Rio today. “Most of the commodities ports belong privately to companies and I am not sure any of them are for sale.”
MMX jumped 8.6 percent to 3.29 reais in Sao Paulo at 2:31 p.m. after gaining as much as 8.9 percent, the most since Jan. 3. Securities linked to port royalties, called MMXM11, surged as much as 7.5 percent.
Batista, 57, has been selling stakes in his oil, logistics, utility and shipping ventures since May as missed targets, mounting debt and accumulating losses forced the former billionaire to cancel projects and sell assets.
With today’s deal, Trafigura and Mubadala are the latest international investors to grab assets from Batista after Germany’s EON SE, EIG Global Energy Partners LLC and Acron AG also acquired pieces of his conglomerate.
International investors are having the opportunity to buy assets that in the past were available mostly to local companies, said Paulo Resende, director of the Infrastructure and Logistics Center of Fundacao Dom Cabral.
“The country is undergoing an emergency in terms of the need to invest in infrastructure,” he said by telephone from Sao Paulo. “The doors are being opened to foreign capital, which is very positive.”
Sudeste, located in Sepetiba Bay about 90 kilometers (56 miles) west of downtown Rio, will reach its full annual capacity of 50 million metric tons of iron ore in 2016 and is scheduled to start operations in August, Ferraz, 48, said in today’s interview. That would be a delay of almost three years from Batista’s most optimistic estimates.
Vale SA, the world’s biggest iron-ore producer, and Cia. Siderurgica Nacional SA also export iron ore from their terminals in Itaguai, which is linked to Minas Gerais by railway. Brazil last year produced 415 million metric tons of the mineral used to make steel, 110 million tons less than Australia, the biggest iron-ore exporter, according to industry group IBRAM.
Trafigura is building a regional commodities hub in Montevideo, where it expects to base its South America trading desks for oil, minerals and metals. The company is investing $20 million in a new office in Uruguay’s capital, which will also host the trader’s port and logistics subsidiary Impala, it said Feb. 4.