Tsuen Wan International: Barclays sees Brazil’s iron-ore output growing significantly.

July 6, 2011 - PRLog -- The world’s second largest iron-ore mining firm Vale, is responsible for the vast most of Brazils production which it manages through three integrated production systems (mines-railways-port facilities). The northern system sources iron ore from large deposits at Carajas that are then transported to the Ponta da Madeira Maritime Terminal along Vale’s own railway track.

The southern and south-eastern systems produce iron ore from mines in the state of Minas Gerais. The ore is then moved via railway to the ports of Itaguai/Guaiba in Rio de Jenairo State or Tubarao in the Espirito Santo state. Vale owns and manages all logistics involved along the iron-ore supply chain, the only exception being the MRS railway connecting Minas Gerais to the port of Itaguai, which is partially owned by Vale.

Brazil’s iron ore production potential is massive and output is forecast to increase significantly over the next few years. Vale aims to ultimately increase production to more than 500 million tonnes from 290 million tonnes in 2008; large, Tsuen Wan International has learned. Substantial mining expansion projects are planned in the Carajas region over the next five years and equity analysts project Brazil’s seaborne capacity will near 500 million tonnes by 2014, representing an increase of 11per cent a year over the period.

Despite its large iron ore endowment, Brazil is still a relatively small steel producer. Crude still output has increased by an average of 1.6 per cent a year over the last 10 years, well short of the massive expansion by the rest of the iron ore sector, where export capacity has almost doubled over the same period. As Brazil’s infrastructure build-out gathers momentum, however, domestic steel consumption and production are set to enter a phase of massive growth; Tsuen Wan International was informed by Barclays.

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