Russia’s steel giant Severstal has entered into an agreement to buy a 25 percent stake in Brazil’s SPG Mineracao mining firm for $49 million, the company said on Wednesday.
Severstal will pay the amount in performance-related instalments. SPG Mineracao holds the licenses to develop several promising iron ore deposits in Brazil’s northern state of Amapa.
Part of the sum will be spent on financing the first phase of the project to confirm the geological potential of the area. Severstal also has an option to acquire an additional 50 percent in the Brazilian company under certain conditions.
“Severstal considers the Amapa project to be highly promising, with preliminary estimated reserves at 0.5-1.5 billion tons of ore and an approximate content of iron at 40-45 percent. Potential production is estimated at 10-20 million tons of iron ore concentrate,” Severstal said in a statement.
The Russian company also said that it would develop its own logistics solutions in Amapa state, even though there are a railway and a sea port near the deposits.
MOSCOW, May 11 (RIA Novosti)