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Brazilian energy group Cosan SA has decided to enter the mining segment in a joint venture with Aura Minerals’ controlling shareholder to explore and transport iron ore, it said in a securities filing on Monday.
Cosan said it and a unit of Paulo Brito Group, founder and controlling shareholder of Aura, will co-control the new company, which will be headed by former Vale SA and CSN SA executive Juarez Saliba de Avelar.
The move by Cosan comes as iron ore prices reached a record high in the first half of 2021, although they have retreated in recent weeks.
Cosan added it has agreed to acquire the Sao Luis port company for 720 million reais ($134 million) from China Communications Construction Company. The port will be used to evacuate iron ore and its ownership will be transferred to the joint venture.
Besides the port, the joint venture will own exploration rights for mining assets in three mineral projects in Brazil’s northern state of Para, near Paraupebas, where giant miner Vale SA also operates.
The JV’s first mineral project is expected to start operation in 2025.
Cosan said this JV marks the first of a series of investments it plans to make through a newly launched investment fund, which may invest in new areas using Cosan’s capital as well as third parties. It did not disclose the sectors it plans to enter through this strategy.
Cosan’s portfolio includes such companies as recently listed energy firm Raizen SA, gas company Compass and logistics firm Rumo.
($1 = 5.3802 reais)
(By Carolina Mandl; Editing by Rosalba O’Brien and Matthew Lewis)
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