Kazakhstan-based mining group Eurasian Natural Resources Corporation Plc. (ENRC) has announced that it has completed the purchase of the outstanding 50 percent of the common shares in the Brazilian iron ore developing company Bahia Minerals BV (BMBV) from Zamin BM NV for a net cash consideration of $670 million, thus becoming the full owner of the company.
BMBV is the sole shareholder of two Brazilian iron ore companies in the state of Bahia, namely Bahia Mineracao Limitada (BML) and Eire Mineracao Limitada (EML). BMBV has a JORC compliant iron ore resource base of 1.808 billion mt with an average iron content of 32.0 percent.
ENRC has also secured an option to purchase from Zamin 100 percent of the outstanding shares of Block V Limited and Caera Minerals Limited, which together own Greystone Mineracao do Brasil Limitada (Greystone), for a cash consideration of no greater than $150 million.
Greystone holds a mineral license adjoining the BMBV project area (BML Project), and has a JORC-compliant iron ore resource base of 147 million mt with an average iron content of 31.8 percent and an additional potential resource of 187.5 million mt. The Greystone option is exercisable up to and including November 15, 2010.
ENRC's BML Project is expected to start production with an estimated 11 million mt of concentrate (dry weight) in 2013, and is expected by 2014 to reach a potential production capacity of 19.5 million mt of concentrate per annum. Development capital expenditure for this project is expected to amount to approximately $2.1 billion.
ENRC purchased its initial 50 percent stake in BMBV in May 2008, for a cash consideration of $306 million.