Navios South American Logistics Inc. agrees to store and transship mineral commodities for Vale International S.A. for a 20-year period
Navios South American Logistics Inc. , a subsidiary of Navios Maritime Holdings Inc. , announced today that it has signed a 20-year agreement with Vale International S.A. ("Vale") for storing and transshipping iron ore and other commodities. Vale is a significant subsidiary of Vale S.A., the world's largest iron ore producer, an investment grade credit rated company, with a market capitalization exceeding $80 billion, the company said in its press release.
Ms. Angeliki Frangou, Chairman of Navios Logistics, said, "Our partnership with Vale emphasizes Navios Logistics' leadership in the Hidrovia Region. We are proud to continue our investment in South America as we build the infrastructure necessary to meet the needs of a global society. This storage and transshipment facility will increase the volumes shipped throughout the region."
Mr. Claudio Lopez, Chief Executive Officer of Navios Logistics, added, "We have developed a strong relationship with Vale through years of providing reliable service. With this agreement, Vale is demonstrating its long term faith in and commitment to Navios Logistics."
The agreement with Vale provides for storing and transshipping five million tons annually of iron ore, plus an option to Vale for an additional one million tons or a total of six million tons, with a guarantee that Vale will use a minimum of four million tons. The agreement provides for fixed tariffs per ton, paid in US dollars, with annual adjustments for inflation and currency fluctuations.
Navios Logistics would expect to generate approximately $35.0 million of annual EBITDA, and $1.0 billion of aggregate EBITDA over the 20-year term, assuming operating costs similar to the operating costs of Navios Logistics' existing dry port terminal.
If Navios Logistics uses the facility for initial maximum capacity, Navios Logistics would expect to generate approximately $50.0 million of annual EBITDA and $1.5 billion of aggregate EBITDA over the 20-year term, assuming operating costs similar to the operating costs of Navios Logistics' existing dry port terminal.
Navios Logistics will provide storage and transshipment services by expanding its existing terminal infrastructure and investing approximately $150.0 million. Upon completion of the expansion of the storage and transshipment facility, the facility will have six million tons of throughput capacity with potential to increase to ten million tons.
The facility could generate additional EBITDA if the facility were expanded to its ten million ton maximum design capacity. Navios Logistics may cancel the agreement without any liability for a number of reasons during the initial two-year period.
About Navios South American Logistics Inc.
Navios Logistics Inc. is a subsidiary of Navios Maritime Holdings Inc. Navios Logistics one of the largest logistics companies in the Hidrovia region of South America, focusing on the Hidrovia region river system, the main navigable river system in the region, and on cabotage trades along the eastern coast of South America. Navios Logistics serves the storage and marine transportation needs of its petroleum, agricultural and mining customers through its port terminal, river barge and coastal cabotage operations.