Brazil’s Usiminas, MMX and LLX ink pact on iron ore transportation and mining

Brazil-based steelmaking and mining company Usinas Siderúrgicas de Minas Gerais S.A. (Usiminas) has announced that it has signed binding contract with Brazilian mining company MMX Mineração e Metálicos S.A. (MMX) and logistics company LLX Logística S.A. (LLX), following the preliminary iron ore transportation and mining agreement signed between the parties in November 2010. 
 
The accords foresees the lease of Pau de Vinho Mine, whose mineral rights belong to Mineração Usiminas, a subsidiary of Usiminas, to MMX, which will have the right to explore the iron ore mine for 30 years. During this period, MMX will have rights to 86.5 percent of the iron ore produced at Pau de Vinho, while Usiminas will get 13.5 percent, as payment of the lease. Pau de Vinho Mine has enough resources to sustain a production level of 8 million mt of iron ore per year.
 
In addition, under the terms of the accords, LLX Sudeste will ship iron ore for Mineração Usiminas according to the following annual volumes: 2012 - 3 million mt, 2013 - 4 million mt, 2014 - 8 million mt, 2015 - 12 million mt, and 2016 - 12 million mt. The contracted volumes are subject to take-or-pay and delivery-or-pay clauses of 80 percent of the contracted volumes in each year. Thus, Mineração Usiminas guarantees its iron ore export flow from 2012 onwards and has the option to renew the contract for one to five years.