Trafigura's Brazil Iron Ore Port Delayed Until 2015?

By MarEx 2014-08-13 09:42:00

The opening of Brazil's iron ore export terminal Porto Sudeste might be pushed back to next year, according to the CEO of steelmaker Usiminas, which has a contract to ship ore through the port.

Dutch trading company Trafigura, which owns a controlling stake in the port with Abu Dhabi government investment fund Mubadala Development Co, said in June the port would open in the third quarter of this year.

But it now seems the start of operations could be delayed.

"We believe the Porto Sudeste will begin operations between the end of this year and the beginning of next year," said Julian Eguren, chief executive officer of the officially named Usinas Siderúrgicas de Minas Gerais S.A., speaking on the sidelines of a conference in Sao Paulo.

The potential delay could hit Brazil's steel mills, which are also mid-sized iron ore producers, with Gerdau SA and Usiminas both looking to export through the port.

Trafigura and Mubadala bought a controlling stake in the port from Eike Batista's mining company MMX Mineração e Metálicos SA at the end of last year for just under $1 billion.

The port will handle 50 million tons of iron ore per year with the potential for future expansion to 100 million tons per year.

Copyright Reuters 2014.