Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA, or Usiminas, has formed an investor group to participate in the auction of a port area in Rio de Janeiro state, Chief Executive Wilson Brumer said, Dow Jones reports.
The port area, known as Area do Meio, or "middle area" at Itaguai is expected to be put up for auction by Rio de Janeiro state's Docks Company before the end of the year, Brumer told reporters on a conference call.
The area, located between existing ports operated by iron ore producers Vale SA and Cia Siderurgica Nacional SA, could be used for exports of iron ore and other products. It is also alongside an area owned by Usiminas, the so-called "Inga" area which was contaminated by a former zinc producer and is being cleaned up by Usiminas.
"We won't participate in the auction on our own," Brumer said. "The Rio de Janeiro government doesn't want just another port. This area will be linked to the Inga area which will be ready in another year at the most."
The idea is that Usiminas will offer its partners--or whoever wins the auction to operate the Area do Meio--the opportunity to use the Inga area, which measures 800,000 square meters, as a port back-up area, Brumer said.
"Whoever wins the auction will most likely approach us to be their client," Brumer said. Various partnerships could be set up to make use of the Inga area, he said.
Even if Usiminas doesn't win the rights to develop its own port at Area do Meio, it will be able to export the iron ore it plans to produce in the future via the Sudeste port that iron-ore mining company MMX Mineracao e Metalicos SA (MMXM3.BR) is currently building, also in the Itaguai area.
Usiminas has a five-year renewable contract to export iron ore via MMX's port.
Usiminas is also seeking to set up new iron-ore mining partnerships in the Serra Azul region in Minas Gerais state, southeast Brazil, and may announce a new partnership in the near future, Brumer said. Earlier this year Usiminas struck a deal with MBL Materiais Basicos to operate MBL's mine reserves and stockpile at Serra Azul on a lease basis to boost its output of iron ore, which currently gives Usiminas better returns than steelmaking.
Despite current markets volatility, Brumer expects high steelmaking raw materials prices--particularly iron ore and coking coal--will continue to pressure steelmakers' margins for years.
Usiminas doesn't expect to be able to raise its steel prices on the Brazilian domestic market, where local prices are currently up to 10% above those of imported steel but are falling, Usiminas directors said on the call.
Usiminas meanwhile expects spot iron-ore prices will stabilize next year at relatively high levels of $140 to $150 a metric ton, Brumer said.
The port area, known as Area do Meio, or "middle area" at Itaguai is expected to be put up for auction by Rio de Janeiro state's Docks Company before the end of the year, Brumer told reporters on a conference call.
The area, located between existing ports operated by iron ore producers Vale SA and Cia Siderurgica Nacional SA, could be used for exports of iron ore and other products. It is also alongside an area owned by Usiminas, the so-called "Inga" area which was contaminated by a former zinc producer and is being cleaned up by Usiminas.
"We won't participate in the auction on our own," Brumer said. "The Rio de Janeiro government doesn't want just another port. This area will be linked to the Inga area which will be ready in another year at the most."
The idea is that Usiminas will offer its partners--or whoever wins the auction to operate the Area do Meio--the opportunity to use the Inga area, which measures 800,000 square meters, as a port back-up area, Brumer said.
"Whoever wins the auction will most likely approach us to be their client," Brumer said. Various partnerships could be set up to make use of the Inga area, he said.
Even if Usiminas doesn't win the rights to develop its own port at Area do Meio, it will be able to export the iron ore it plans to produce in the future via the Sudeste port that iron-ore mining company MMX Mineracao e Metalicos SA (MMXM3.BR) is currently building, also in the Itaguai area.
Usiminas has a five-year renewable contract to export iron ore via MMX's port.
Usiminas is also seeking to set up new iron-ore mining partnerships in the Serra Azul region in Minas Gerais state, southeast Brazil, and may announce a new partnership in the near future, Brumer said. Earlier this year Usiminas struck a deal with MBL Materiais Basicos to operate MBL's mine reserves and stockpile at Serra Azul on a lease basis to boost its output of iron ore, which currently gives Usiminas better returns than steelmaking.
Despite current markets volatility, Brumer expects high steelmaking raw materials prices--particularly iron ore and coking coal--will continue to pressure steelmakers' margins for years.
Usiminas doesn't expect to be able to raise its steel prices on the Brazilian domestic market, where local prices are currently up to 10% above those of imported steel but are falling, Usiminas directors said on the call.
Usiminas meanwhile expects spot iron-ore prices will stabilize next year at relatively high levels of $140 to $150 a metric ton, Brumer said.