Iron ore majors ramp up supply even as China faces challenges
Iron ore is one of the year’s worst performing major commodities, slumping by almost a quarter as China’s property crisis drags on.
Gerdau has revealed the details of its 3.2 billion reais ($653 million) investment on the Miguel Burnier iron ore mine in Minas Gerais state.
The new platform will raise the production capacity of Gerdau’s mine to 5.5 million metric tons of iron ore per year and is scheduled to start operating at the end of 2025.
SRK has certified the presence of 476 million metric tons of proven and probable iron ore reserves in the deposits under concession rights at the facility located in the Ouro Preto district.
“All investment in this project will be made with our internal funds, and we have no intentions of deferring these investments, despite observing some firms in our operational sectors delaying their investments due to the prevailing challenging macroeconomic circumstances,” CEO Gustavo Werneck told BNAmericas.
“This volume of reserves brings us considerable assurance that we are embarking on a long-term investment in an asset that will yield substantial returns for our operations,” Werneck said.
According to the company, around 60% of the projected investments are for mining, crushing, concentration and filtering. 20% will be invested in logistics, which will include the iron ore pipeline and the tailings pipeline, along with in the rail terminal, and the other 20% will be for several other areas, including the energy transmission line.
Miguel Burnier’s mining operations were closed at the end of 2015 due to weak iron ore and steel market conditions. After the investments, the mine will supply Gerdau’s steel units in Minas Gerais state.
Brazil’s largest steelmaker reported on Wednesday an adjusted EBITDA of 3.8 billion reais ($770 million), one of its best historical results for the period.
In Q2 2023, Gerdau’s crude steel production was 3.1 million tonnes, up 3.0% from Q1 2023 and down 10.2% from the same period last year
