MMX, the mining company owned by the entrepreneur Eike Batista, began to expend the planned funds for expansion of the Serra Azul complex, in Minas Gerais, a project budgeted at $2.39 billion.
Already with the permit that was missing for works, the company has invested $99.67 million in the work. And the remaining, $2.29 billion, will be invested over the next two years.
“We have started the works now and there are 24 months for the installation,” CEO of the company Guilherme Escalhão told Reuters on Friday.
From the Serra Azul complex, MMX plans to extract 29 million tons of ore per year with operations at full capacity – a volume greater than the 24 million tons initially anticipated.
With the increased production capacity of the project, MMX has also raised its Capex, from $2 billion to $2.39 billion for investments, as reported to the market in late April.
The environmental permit for the project installation was obtained at the end of April.
Opportunities
By advancing the geological knowledge of the mine, process of reserve certification, and engineering, we have identified some opportunities for the project improvement and we ended up getting a project of 29 million tons, which of course ended up adding equipment, he said.
MMX plans to develop a production system capable of extracting ore with low iron levels, optimizing the process with increased production. The Serra Azul reserves are estimated at 1.9 billion tons of iron.
Currently, processed ore has an iron content of about 57, 58 per cent… This new plant will be able to handle ore with 36 per cent of iron… It is the first environmental gain, recovers ores which in a normal scenario would not recover, makes greater use and recovers more ore.
The environmental permit for installation obtained in April allowed the start of construction of the Serra Azul processing complex, located in the Iron Quadrangle in Minas Gerais, which will more than triple the MMX production – the current installed capacity of MMX is 8.4 million tons per year.
The company ended 2011 with production of 7.5 million tons of iron ore, considering the Southeast and Corumbá systems.
The project expanded in Minas Gerais, with prospect to become operational in the first quarter of 2014, provides rail terminal plant, a long-distance conveyor belt, ducts and structures for power transmission.
In addition to the increased production capacity of Serra Azul, the increase of expansion project Capex is also due to the decision to expand the logistics to make room to the ore transportation from the Pau de Vinho mine, located next to Serra Azul, and that will also be handled by the Porto do Sudeste (Port of Southeast).
The Superport of Southeast, as it is called by the company, is in advanced stage of construction in the city of Itaguaí (state of Rio de Janeiro). It will have operational capacity of 50 million tons per year in the first stage, and MMX is working to expand it to 100 million tons eventually in a second stage.
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