CVRD aims to double value of manganese assets

Brazilian mining and metals behemoth CVRD (NYSE: RIO) aims to double the value of its manganese assets to US$1bn by the end of the decade, a company spokesperson confirmed. Armando Franco, the head of the company's ferrous division, said CVRD does not rule out new acquisitions in the sector but emphasized that any such move would be made cautiously and seek out comfortable returns on investment. Along these strategic lines, CVRD announced the start of operations of its wholly owned subsidiary Rio Doce Manganese Norway (RDMN), located in Mo I Rana, Norway, on Monday. RDMN, formerly owned by Norway's Elkem Rana, was acquired by CVRD in February this year for US$17.6mn. The Brazilian company is investing US$10mn to convert the plant to produce ferro-manganese alloys, including the revamping of one of its electric furnaces, environmental protection and safety procedures. The RDMN plant production capacity is 110,000t/y of ferro-alloys and it will produce ferro-silicon manganese and ferro-manganese high carbon alloys. RDMN is consuming manganese ore fines supplied by CVRD's Azul mine, located in the Carajas mineral province, in northern Brazil's Para state, the company said. The new unit is slated to begin operating at full steam in November when a second electric furnace starts up. One of the reasons for investing in plants in Europe is to sidestep trade barriers when selling to the United States. "On silicon manganese, for example, the [tariff] barrier reaches 80% [when exporting from Brazil]," Luis Carlos Nepomuceno, the head of CVRD's manganese assets in Europe, was quoted as saying by Jornal de Commercio business daily. But when sold from Europe, the products do not pay a duty. RDMN is expected to post revenue of US$60mn a year. Rio de Janeiro-based CVRD has numerous mining, metals and logistics operations, and is the world's largest iron ore producer.