Alexandre Rocha*
São Paulo – Samarco, a Brazilian mining company and industry, has announced its new investment plan baptized Third Pelletizing Project, which involves investment of US$ 1.183 billion to increase the productive capacity by 54%. The decision was taken on Thursday (20) in London by the company administrative council, which is controlled by Brazilian mining giant Companhia Vale do Rio Doce and by multinational company BHP Billiton. The company expansion plan was announced by ANBA in August.
According to information announced by Samarco, the plan includes construction of an iron ore concentration mill in Germano, in the city of Mariana, in the southeastern Brazilian state of Minas Gerais, a new 400 kilometre long ore pipeline between the city in Minas and Ubu port city, in the state of Espírito Santo, also in the southeast, and a factory for the production of iron pellets, the third, in the city of Ubu, where the company already has a sea terminal.
The company is also going to buy equipment and expand installations in the mining, storage and product shipping areas. According to Samarco, the projects will be begun immediately and should be completed in February 2008. "Samarco will consolidate its position as the second largest transoceanic supplier or iron ore," according to a company statement.
With these new enterprises, Samarco hopes to increase the current production of 14 million tonnes a year to 21.6 million tonnes. This, as company commercial director Roberto Carvalho, said to ANBA, is to supply the foreign market. The company already exports 100% of production, which is at its maximum limit.
Arab clients
In this scenery, the Arab countries are playing an important part, as they are the main buyers of iron pellets turned to the process of "direct reduction", the technique that uses natural gas as a "reducer" in the process of production of steel. In all, the market in the region consumes 22% of Samarco exports.
Samarco is eyeing the growing ironworks industry in the Arab countries, both in new projects and in the increase of demand by the company clients, like Saudi company Hadeed and Qatar Steel Company.
In 2004, the company sold 14.1 million tonnes of iron pellets, or 2.8% more than in 2003, and had revenues of around US$ 850 million. In the first half of 2005, sales reached 7 million tonnes and revenues reached US$ 490 million, with growth of 24% over the same period last year.
*Translated by Mark Ament
