MMX and LLX, mining and logistics companies of the EBX Group, controlled by Eike Batista, announced today (16/11) that a preliminary agreement was entered with Usiminas. The public announcement, which was filed in the Brazilian Securities and Exchange Commission (CVM), provides that Usiminas will hire the Sudeste Superport’s port services – LLX's asset being acquired by MMX – and that MMX will jointly develop the Pau de Vinho mine, located in the Serra Azul region, in the Quadrilátero Ferrífero de Minas Gerais [Minas Gerais Iron Quadrangle], and whose mining rights belongs to Usiminas.
The agreement states that, in order to facilitate joint operations in the Pau de Vinho mine, MMX will make the necessary investments for the extraction and production of iron ore. The volumes produced shall be determined quarterly and divided as follows: 86.5% for MMX and 13.5% for Usiminas. According Usiminas studies, the Pau de Vinho mine has enough mineral resources to produce 8 million tons of iron ore per year. MMX and Usiminas have adjacent operations in the Serra Azul region.
In the same agreement, Usiminas will hire port services from PortX Operações Portuárias – company created from LLX’s spin-off and formed by the Sudeste Superport, which is currently being acquired by MMX – for iron ore shipments between 2012 and 2016. The preliminary agreement exposes the following iron ore shipments: 3 million tons in 2012; 4 million tons in 2013; 8 million tons in 2014; 12 million tons in 2015; and 12 million tons in 2016. Contracted volumes will have a take-or-pay clause of 80% of the annual volumes.
According to MMX’s CEO and Investor Relations Officer, Roger Downey, Serra Azul should be seen as a single resource and the Sudeste Superport is the key to a consolidated, integrated and unified Serra Azul. "I have no doubt that this is an important step to reach the goal of consolidating this region. Synergies between MMX and Usiminas are clear and the economic reason generates beneficial results to both companies, “he emphasized.
The Sudeste System is formed by the Serra Azul and Bom Sucesso units. In the Serra Azul region – Quadrilátero Ferrífero de Minas Gerais [Minas Gerais Iron Quadrangle] – MMX operates the Tico-Tico and Ipê mines, acquired, respectively, in late 2007 and early 2008. The system currently has the capacity to produce 8.7 million tons of iron ore per year.
In the Bom Sucesso unit, in the Center-West region of Minas Gerais, MMX has rights to extract iron ore. This enterprise is at the stage of geological surveys. MMX estimates that by 2015 the Bom Sucesso Unit will be producing 10 million tons of iron ore per year.
MMX also features the Corumbá System, in the state of Mato Grosso do Sul, in operation since 2006. In this system, the installed capacity of annual production is 2.1 million tons.
In Chile, MMX operates through its subsidiary Minera MMX de Chile. The company holds mining rights for the extraction of iron in the region of the Atacama Desert. MMX expects that it will produce 10 million tons of iron ore per year by 2015.
In early 2010, the Chinese Group Wuhan Iron and Steel Corporation (Wisco) acquired 21.52% of the company. Also in 2010, the company announced the conclusion of the contract which provides for the capital increase and the entrance of the South Korean company SK Networks also as a company shareholder.