Sul Americana de Metais (SAM), a company owned by Chinese holding Honbridge Holdings, will delay its $2.1 billion iron ore project in Brazil for a year, following difficulties to get environmental licensing and the Covid-19 pandemic, a media report by Estadao said.
The SAM-owned project in Minas Gerais state intends to produce 30 million mt/year of low Fe content iron ore. The project also includes an iron ore open pit, and a slurry pipeline.
The company had originally expected to commence iron ore production by 2024, but it has now delayed the project’s startup to 2025.
“(Environmental) licensing was halted. And our timeline is suffering a delay,” said Gizelle Andrade, relationship and environment director at SAM.
As previously reported by SteelOrbis, Brazil’s Federal Justice has suspended licensing of SAM’s iron ore project. The court’s decision came after prosecutors at a federal and at a state level court in Minas Gerais state filed a lawsuit demanding federal environmental watchdog, Ibama, to “properly” review the licensing process.
Despite the delayed project, Andrade says Chinese shareholder, Honbridge, remains confident and interested in the project.
“The (licensing) halt and the pandemic will be over. The investors have a long-term planning,” she said.
SAM intends to build a “mega dam” with an 845 million-cubic-meter capacity to store waste. It should also make changes in the project to make the dam safer, following the Mariana and Brumadinho dam tragedies.