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Vale and Usiminas sign Iron and Steel transport deals

Vale SA and Usinas Siderurgicas de Minas Gerais Thursday announced they had reached an agreement via signing of contracts that will see the undertaking of steel and iron ore transport utilizing Vale’s rail system. Sinas Siderurgicas de Minas Gerais, also known as Usiminas, the steel manufacture, reported it had concluded the deal with the giant iron ore mining company, Vale SA. 

 

The contractual investment deal will be undertaken over a six year time frame and will involve Vale transporting about 990,000 metric tonnes per annum of Usiminas’ steel, to commence next year from Usiminas’ Ipatinga operations in the Brazilian state of Minas Gerais to the Sao Paolo state, a statement from the company read. The new transport deal will take up the tonnage by 32% over what is currently transported under the current deal with Vale SA and additionally enables Usiminas to institute per annum cost savings of about $1.07 million.

 

The cost savings, according to the company, will accrue from the fact that, with the use of the efficient rail system, road transport will be minimized, thus the company will produce nearly 150 wagons for use with the signing of the new deal. Additionally, the five year iron ore transport agreement deal will enable Usiminas to bolster the amount it transports from its mines in the state of Minas Gerais to Ipatinga to about 155,000 tonnes from the existing 120,000 tonnes per month, the statement further indicated.

 

Vale SA is a Brazilian metals mining giant with interests in iron ore and iron ore pellets amongst other metals. Vale as well operates a logistics business in Brazil with various investments in JV and affiliate businesses in the energy and steel industries. The company’s global operations have seen it set up base in Canada, Indonesia and New Caledonia.

 

However, its chief nickel mining business is undertaken by its subsidiary, Vale Inco Ltd that carries out the global operations in the three countries. Vale has been on the acquisition trail, taking over Rio Tinto’s Corumba iron ore mine in Brazil and its logistics business as well. On the other hand, Usiminas is a steelmaker listed on the Sao Paolo stock Exchange, with 13 companies and mining, steel and iron operations amongst other businesses such as logistics. Usiminas currently employs 29, 784 employees in its facilities across the country.

 

The deal is expected to bolster the operation of its steelworks in Ipatinga. The company has a rated capacity of 9.4 metric tonnes per annum, accounting for almost 25% of the Brazilian steel market.

 

9 July 2010.