Expectations grow for sale of Brazilian iron ore miner Bamin

Brazilian stakeholders are hopeful the sale of iron ore miner Bahia Mineração (Bamin) will conclude successfully, unlocking major investments in infrastructure associated with its operations.

Earlier this year, Kazakhstan's Eurasian Resources Group put Bamin up for sale, attracting interest from a consortium led by mining giant Vale with the participation of local mining company Cedro Mineração and development bank BNDES, a person involved in the talks told BNamericas.

The evaluation of the company continues and a decision on the sale is likely at the start of next year, the person added.

The acquisition of Bamin by the Vale-led consortium is seen as crucial for the logistics sector. Bamin is expanding the Pedra de Ferro iron ore mine in Bahia state and building the Porto Sul deepwater port and a section of the east-west railway known as FIOL.

"There is hope for Vale to take over the company because we are talking about one of the largest mining companies in the world, with significant cash flow to make the heavy investments that the Bamin project demands," an executive from a Brazilian infrastructure association told BNamericas, asking not to be named.

"To complete the entire logistics project relating to Bamin's activities, at least another US$5bn is needed, and Vale would be able to raise these resources much more easily than the current Bamin controller," the executive said.

If the talks are successful, Vale would assume a controlling stake in Bamin, while Cedro would hold between 20% and 30% with the remainder owned by BNDES.

In 2022, Bamin announced a plan to invest 20bn reais (currently US$3.5bn) to develop the Pedra de Ferro mine, along with the logistics network to support its operations, including FIOL and Porto Sul.

Pedra de Ferro’s iron ore capacity is currently around 1Mt/y but is forecast to rise to 26Mt/y in the coming years. Meanwhile, construction of the FIOL section is 60% complete.

The mine has high iron content of up to 68%, which is considered attractive by steelmakers aiming to reduce their emissions.