MMX assumes operation of Amapá RR

A popular saying is that a cat has seven lives, and maybe so does a railroad. At least that seems to be the case of the Amapá Railroad. The railroad was built in the 1950s to haul manganese ore, which it did for almost 50 years; the ore was exhausted, along with the concession, and the railroad became state property. Then the government discovered it was generating deficit, partly because of insufficient loads and partly because the state had built a highway parallel to the railroad. The state then awarded a new concession for a company that did not honor the concession and now awarded it to MMX Mineração.

MMX Mineração is a well capitalized company that intends, in association with Cleveland Cliffs, to explore an iron ore mine located about 100km west of the Serra do Navio mountains, a terminal of the Amapá Railroad. In all, between investments in the railroad, port terminal, iron ore mine, mill for pig iron and semi-finished products, the two companies will invest US$ 915 million. In other words, while during the times of manganese ore the state merely exported raw material, now there could be a beginning of industrialization in the region, generating wealth and jobs in a poor area.

The railroad, semi-abandoned and in precarious state, will be entirely rebuilt and modernized. Transport between the mine and railroad will be by truck. Depending on the reserves and quality of the ore in the MMX mine, it may become worthwhile to extend the railroad, but the mere 20-year concession makes this unlikely; a longer concession would have to be negotiated, provided there is sufficient ore of sufficient quality to justify the extension.

A curious fact: Amsted-Maxion, biggest railroad car manufacturer in Brazil, when announcing its sales in January, showed that its biggest sale was for the Amapá Railroad. It sold merely 82 wagons, indicating that the sales boom of the years 2004/5 is over.

Fonte: Folha de São Paulo