Russian steelmaker OAO Severstal announced Wednesday that it has acquired a 25 percent stake in Brazilian company SPG Mineração (SPG), which owns iron ore exploration licenses in Amapa, Brazil. Severstal has also entered into an option agreement to purchase an additional 50 percent stake in SPG.
Severstal will pay $49 million in performance-related installments, with part of the amount to be directed to finance the first stage of geologic exploration, which aims to re-confirm the attractive geologic potential of the target's properties.
Estimated iron ore resources of the Amapa project are 0.5 to 1.5 billion metric tons with an approximately 40 to 45 percent Fe grade. Production potential however, is estimated at about 10 to 20 million metric tons of iron ore concentrate.
While the Amapa project is located near a railway and port, Severstal is also considering developing its own logistics solution.