Trafigura Seeks Brazil Mining Deals After Buying PortJuan Pablo Spinetto
Trafigura Beheer BV, the world’s second-biggest metals trader, is considering new investments in Brazil after gaining control of an iron-ore port as it expands operations in South America.
The Amsterdam-based Trafigura is looking into opportunities mainly in mining projects in the world’s second-largest iron-ore exporter, Mariano Marcondes Ferraz, chief executive officer for Trafigura’s DT Group venture, said in an interview in Rio de Janeiro yesterday. The company may consider buying mines or help current producers to boost their production capacity by financing expansions, he said.
“We are looking into further investments,” Ferraz, 48, said without providing further information on any possible deal. “Naturally, mining is a target for the group.”
Trafigura is building a regional commodities headquarters in Montevideo, Uruguay, where it will base its South America trading desks for oil, minerals and metals. The privately held trader, together with partner Mubadala Development Co., yesterday completed the purchase of a 65 percent stake in Eike Batista’s Sudeste port in Brazil for $400 million, gaining a foothold to export iron ore mined in landlocked Minas Gerais state and bound for Asia and Europe.
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, who is a board member of the port unit, said. That would be a delay of almost three years from Batista’s most optimistic estimates.
“It was a unique opportunity,” Ferraz said of the acquisition. “Most of the commodities ports belong privately to companies and I am not sure any of them are for sale.”
Porto Sudeste do Brasil SA, the venture that controls de terminal, is in talks with undisclosed iron-ore producers to use its terminal to ship the commodity and will have about 400 employees once it completes its ramp up, Ferraz said. The unit, which hired former Vale SA executive Eugenio Mamede to lead operations, is also doing studies on the feasibility of using the port to ship other bulk or soft commodities.
Trafigura started iron-ore operations in 2009 and last year traded 4.3 million metric tons globally, including shipments from Brazil and Australia.
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 yesterday’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. Trafigura made the acquisition through its Impala warehousing and logistics unit, while Batista’s MMX Mineracao & Metalicos mining unit kept a 35 percent stake in the port.
Vale, 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.
Shares of MMX were unchanged at 3.19 reais in Sao Paulo at 12:49 p.m. after gaining 5.3 percent yesterday. Securities linked to port royalties, called MMXM11, gained 0.8 percent.