New terminal in Itaguai Port will open doors for mining companies

Sep, 18, 2023 Posted by Gabriel Malheiros

Week 202338

After years of lobbying with state and federal governments, small iron ore producers in Minas Gerais may finally have access to a dedicated port terminal for shipping their production to the international market.

The National Waterway Transportation Agency (Antaq) has just approved a project for the construction of a new terminal in Itaguaí, Rio de Janeiro, located between the Vale and CSN facilities in an area popularly known as the “Área do Meio” (Middle Area). Within the agency, the project is referred to as ITG-02.

Once completed, this terminal will significantly impact the country’s commodity market and increase the global supply of iron ore. These smaller mining companies, often referred to as “portless miners,” will have the capability to expand their production and export capacity.

Currently, they depend on space at Vale and CSN port terminals in the port area of Itaguaí on the coast of Rio de Janeiro for their exports. Due to the difficulties in exporting, they end up selling a significant portion of their production to these two companies, which are leaders in the country and own ports.

Small miners have argued that this export limitation hinders their expansion plans, as the primary consumer market is international, especially China. Vale and CSN Mineração prioritize their own production.

See below a chronological overview of iron ore exports from Brazil’s Port of Itagui between Jan 2019 and July 2023. The data is from DataLiner.

Iron Ore exports from Itaguai | Jan 2019 – Jul 2023 | WTMT

Source: DataLiner (click here to request a demo)

According to Antaq, the plan is to prepare an auction notice for the terminal in the first quarter of 2024, considering that the process at the Federal Court of Accounts (TCU) has yet to begin. The notice will first go through the Ministry of Ports and Airports. The agency approved the draft notice for ITG-02 in early September.

According to Antaq data, the contract is expected to have a term of 25 years. It will involve investments of R$2.7 billion in the new terminal, which will have an area of 348,937 square meters and a static capacity of 900,000 tons. Valor has learned that the amount could reach R$3.2 billion over the concession period, in addition to the grant fee. The capacity could handle up to 30 million tons per year.

The project can be accessed by roads and railways and will serve the states of Rio, Minas Gerais, Espírito Santo, and São Paulo. In Minas, the largest iron ore producer in the country, production is concentrated in the Quadrilátero Ferrífero region, where dozens of smaller mines are located.

Valor has learned that small producers of iron ore like J. Mendes, Cedro, Vallourec, Musa (linked to Usiminas), Herculano, ArcelorMittal Mineração, Itaminas, Minerita, Mineral, Gerdau (if it decides to export in the future), AVG, Global, Bemisa, Comisa, among others, would benefit from the new terminal for steel commodity exports.

According to information obtained by Valor, the production of these companies was 49 million tons in 2020, with 63% intended for international markets. For 2021, the forecast was 55 million tons, with 32 million tons for export via the Sepetiba System.

The projection for 2025 is to export 73.4 million tons of ore with increased supply. These mining companies are estimated to produce around 101 million tons that year. The new terminal is expected to commence operations around 2026.

Third-party ore shipments total approximately 18.4 million tons through the Porto Sudeste, 11 million tons through CSN Mineração’s terminal, and about 5 million tons through Vale’s terminal. In the Port Complex of Itaguaí, Vale operates the Terminal da Ilha Guaíba and the CPBS Terminal. At the same time, CSN Mineração has Tecar, and Porto Sudeste has a TUP dedicated to third-party cargo.

Source: Valor Econômico

To read the original news article, click on: https://valor.globo.com/empresas/noticia/2023/09/18/novo-terminal-no-rj-vai-abrir-portas-para-mineradoras.ghtml

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