Encouraged by the federal government, the Vale is in final negotiations for the purchase of Bamincluding their three major projects in Bahia: an iron ore deposit in Caetité, the concession for section 1 of the West-East Integration Railway (Fiol) and Porto Sul in Ilhéus.
According to two high-ranking government sources, the National Bank for Economic and Social Development (BNDES) has been directly involved in the negotiation and has scheduled meetings for this week in São Paulo, involving Vale and investors who can go into business together with the mining company.
Bamin currently belongs to the Eurasian Resources Groupwith origins in Kazakhstan and headquarters in Luxembourg, has produced just over 1 million tons of iron ore per year — a small fraction of what the original project promised (around 20 million tons per year).
For now, the problem is just business. But it can affect the logistics of the country in a few years. And that’s why it became a topic in Brasília.
In 2021, under the management of former president Jair Bolsonaro (PL) and with current governor Tarcísio de Freitas (Republicans) at the head of the Ministry of Infrastructure, the Bam it won the Fiol auction.
The company took over, for 35 yearsthe concession of a section of 537 kilometers between the Bahian municipalities of Caetité and Ilhéus. The railway was, at the time, with 73% execution as a public work. The plan was to finish it by the end of 2025in addition to implementing communication and signaling systems.
So far, however, little has happened and the schedule is committed. Bamin also did not start work on a port terminal at the end of the line, in Ilhéus (within a larger project called Porto Sul), to transport the cargo transported by railway.
The drama lies in the fact that Fiol has two other sections. Section 2 (Caetité-Barreiras) is under construction by the state-owned company Infra SA, but is unable to function properly. independentas it does not connect alone with any railway or port.
Section 3, between Barreiras (BA) and Mara Rosa (GO), has not yet had works started and must be offered to private initiative through a concession. It will connect to the North-South Railway.
The issue is that, without section 1 of Fiol and the South Port of Ilhéus, the economic equation of the other two sections is seriously compromised and logistics flow options become reduced.
In front of slowness of Bamin, the Ministry of Transport and the Civil House entered into alert. Aides to President Luiz Inácio Lula da Silva (PT) took advantage of the renegotiation of Vale’s railway concessions — the Carajás Railway (EFC) and the Vitória-Minas Railway (EFVM) — to also negotiate the Bamin issue.
According to a minister told CNNin a reserved manner, Vale’s top management — including the new CEO, Gustavo Pimenta, who took office in October — agreed to buy the “complete package” of the Bahian mining company: the Pedra de Pedra project in Caetité, section 1 of Fiol and the port terminal in Ilhéus. Other investors can enter into partnership.
Wanted, the BNDES has not officially confirmed meetings will be held this week to discuss the deal.
Vale only informed that “the Company’s potential participation in acquisition, divestment or joint venture operations, or other business opportunities, is evaluated in light of its strategic priorities”.
“In this sense, the Company informs that there is no relevant information to disclose to the market as a result of this prospecting at the moment. The Company also reiterates that it will continue to keep the market informed of any material facts regarding such operations.”
