Gerdau Group can manufacture rails in Ouro Branco

The Usina Ouro Branco (formerly Gerdau Açominas), company controlled by the Gerdau group from the state of Rio Grande do Sul, confirmed to DIÁRIO DO COMÉRCIO that is reviewing the possibility of producing rails in the plant of Ouro Branco (Campo das Vertentes). The project is justified by the new reality of the country’s railroad industry, which, as the federal government’s announcement made in August last year, should receive investments of $44.48 billion to build 10,000 km of railroads in the coming years.

In a statement, the company said it is currently reviewing the possibility of producing rails considering the new reality of the railroad industry in Brazil, but so far there is no definition. Since 2010, the Ouro Branco’s plant has a profile rolling machine, which enables the production of rails.

According to market estimates, the investments necessary to build a rail plant are near $733.2 million. However, since Gerdau already has part of the structure required to perform the output, the inputs may be smaller. If the group starts manufacturing, the line in Ouro Branco will be the only one in operation in Brazil.

The Companhia Siderúrgica Nacional (CSN) produced the rolling stock, but it ended activities in the 90s due to low industry demand in Brazil. Currently, the concessionaires and the federal government import the rails from Asia and Eastern Europe. Most imports come from China and Ukraine.

In August last year, during debate on the National Mining Plan and the New Regulatory Framework of the industry, held in the Legislative Assembly of Minas Gerais (ALMG), in the state of Belo Horizonte, the superintendent of Mineral Policy of the State Department of Economic Development (Sede), Eduardo Carlos Jardim Mozelli, said that Vale was also studying building a steel mill to manufacture rails in the city of Governador Valadares, in the Vale do Rio Doce.

Most of the production would be consumed by the mining company itself, which has control of three railroads: Ferrovia Centro-Atlântica (FCA), Vitória to Minas Railroad (EFVM) and Carajás Railroad. The possibility of Vale to build a steel mill in Governador Valadares emerged in 2010, as a counterpart demanded by the state government to implement the project Apollo, mining complex in Serra do Gandarela (Central region). Neither the steel mill nor the project Apollo gets started until now.

Contributions

Minas Gerais should receive most of the contributions for the railroad industry in the coming years. Recently, the CEO of the Empresa de Planejamento e Logística (EPL), Bernardo Figueiredo, revealed that out of the $44.47 billion in investments in 10,000 kilometers of railroads announced by the federal government, at least $14.66 billion should be directed to branches that pass through the state, reaching a total of around 3,000 kilometers of rails.

According to him, most of the stretches covered by the package must have the notice to bid published in May, and the works should start in 2014. Among them, Figueiredo cited the railroad that goes from Lucas do Rio Verde (state of Mato Grosso), pass through Uruaçu (state of Goiás) to arrive at Corinto (Central region) and then in the Vale do Aço region, and the branch linking the capital to Salvador (state of Bahia) and then to Recife (state of Pernambuco).

The stretches that are included in the federal government’s program are: Ferroanel’s North and South stretch, in São Paulo; access to the port of Santos, also in São Paulo; the stretch between Lucas do Rio Verde (state of Mato Grosso) and Uruaçu (state of Goiás); the stretch between Estrela d’Oeste (state of São Paulo), Panorama (state of São Paulo) and Maracaju (state of Mato Grosso do Sul); and the stretch between Açoilândia (state of Mato Grosso) and Vila do Conde (state of Pará).

Other stretches are: Uruaçu (state of Goiás), Corinto (Central region) and Campos dos Goytacazes (state of Rio de Janeiro); Salvador and Recife; Belo Horizonte and Salvador; Rio de Janeiro, Campos dos Goytacazes and Vitória; Maracaju (state of Mato Grosso do Sul) e Mafra (state of Paraná); and São Paulo, Mafra and Rio Grande (state of Rio Grande do Sul). Figueiredo said that the federal government is already anticipating the environmental licenses.