Brazil's Vale offers govt US$3.7bn for early rail concession renewals

Brazilian mining giant Vale has offered the government around 20 billion reais (US$3.7bn) for the early renewal of its Carajás and Vitória-Minas rail concession contracts.

“Vale’s proposal involves financial payment and some works. [This agreement] has to be made as soon as possible. I believe the government is now once again in a position to make a decision,” transport minister Renan Filho told local daily O Estado de S. Paulo.

In 2020, the Jair Bolsonaro administration renewed rail concession contracts that were due to expire in 2027.

However, after President Luiz Inácio Lula da Silva took over in January last year the government began reviewing the agreements, as it considered the pledged investments to be too low.

Under the new talks, Vale started offering 16bn reais to renew the contracts and the government was asking for 25.7bn reais.

The Lula administration is looking to close a deal soon in order to use the fresh resources to reduce the fiscal deficit.

The government is also optimistic about reaching a final agreement in the near term since Vale will have a new CEO as of next month, the recently named Gustavo Pimenta. 

Pimenta has expressed interest in closing some of the company's pending issues before the end of the year, including the rail contracts.