UK-based miner Brazil Iron has made a bid of approximately $1bn (£771.92m) to acquire the Bahia Mineração project (Bamin) in Brazil from Kazakhstan-based Eurasian Resources Group (ERG), reported Bloomberg, citing people familiar with the matter.
The Bamin project, operated by ERG subsidiary Bahia Mineração, is an integrated mining and logistics initiative that has attracted interest from various parties.
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The deal will include Bamin’s iron ore mine project, a prospective deep-sea port and a rail link in north-east Brazil.
Brazil Iron has entered into a non-disclosure agreement with ERG for the potential deal.
The offer from Brazil Iron could enable ERG to recover the majority of its initial investment in the project, said one of the sources.
The Bamin project requires an investment of around 30bn reais to expand the mining operations, construct the port and complete a 527km railway.
Brazil Iron’s interest in the project is strategic as the completion of the port and railway is crucial for advancing its iron ore project roughly 135 miles from Bamin.
The company’s goal is to produce hot briquetted iron, a key material for manufacturing low-carbon steel using electric arc furnaces.
Once fully operational, Bamin is expected to yield up to 26 million tonnes of iron ore annually.
The Brazilian Federal Government has also shown interest in the project to promote infrastructure development in the region.
It has been keen to facilitate a deal involving a potential consortium between Vale, with a 50% stake, Cedro Mineração with a 30% stake and the Brazilian development bank BNDES holding the remaining interest.
Vale, however, is still evaluating the project’s viability, with CEO Gustavo Pimenta stating last month that it was premature to confirm any acquisition plans.
The Bamin project’s railway, which passes through 19 municipalities in Bahia state, is a priority for the government due to its potential to support industries including agriculture and mining.
The Brazilian Government is willing to invest 5bn reais to help complete the railroad, with BNDES financing a portion of the investment.
In October 2023, ERG signed an agreement with electric vehicle battery materials producer EVelution Energy to supply cobalt under a five-year agreement.
