The world's largest iron ore producer, Brazilian miner Vale and its affiliated company Companhia Italo Brasileira de Pelotização (Itabrasco) have signed a leasing contract involving a pelletizing plant located in Tubarão complex, in the Brazilian state of Espírito Santo, for a period of ten years, as from October 1, 2008.
Itabrasco, which is specialized in the production and sale of iron ore pellets, is a JV between Vale and Italian steelmaker Ilva International S.p.A. (Ilva), each with a 50.9 percent and 49.1 percent stake, respectively.
Under the terms of the contract, Vale has agreed to pay for the leasing an annual payment in order to guarantee Ilva the same level of profitability. Furthermore, Vale will consolidate 100 percent of Itabrasco's pelletizing operations in its financial statements, simplifying its financial report.
The leasing of Itabrasco is in line with Vale's goal to increase its exposure to the iron ore business and to capture synergies in the port of Tubarão, which includes the resulting improvement of efficiency of operational assets and processes.