Brazilian mining group MMX Mineracao e Metalicos S.A. (MMX) has decided to invest 5 billion Brazilian Reais (US$2.9 billion) to expand its operations. The company's board has approved the investment in two iron ore mining projects both of which are located in Brazil.
Of this investment about 3.5 billion Reais will be used for the expansion of the company’s Serra Azul project located in the south eastern state of Minas Gerais. A new processing plant will also be included. It will have the capacity to handle 24 million tonnes of iron ore annually.
At the Bom Sucesso project in Minas Gerais MMX will invest 1.5 billion Reais to build a 10 million tonnes a year plant. A similar plan for an iron ore project of the company in Chile is undergoing geological and engineering studies.
A syndicated loan has been secured by MMX for the Serra Azul project. The capital structure for the financing will be 75 % debt to 25% capital. The company is owned by the Brazilian billionaire Eike Batista. Mr Batista is reportedly rebuilding his portfolio of iron ore mines and logistics after the sale of two major projects to the Anglo American mining company.