MUSA Projects Iron Ore Export Expansion toward 2015

Mineracao Usiminas (MUSA), Brazilian iron ore producing company controlled by Usiminas with 70% shares and Sumitomo Corporation with 30% shares, will enlarge iron ore export in and after October 2012. MUSA plans to increase its iron ore production to 29 million tonnes per year in 2015 from current approximately 7 million tonnes per year. The export is planned to increase to approximately 20 million tonnes in 2015.

Mr. Kazuo Ota, MUSA’s sales officer and Sumitomo Corp’s previous officer, explained at an interview with Japan Metal Bulletin in Belo Horizonte, Brazil, that EBX Group’s new port facility in Rio de Janeiro will complete for October-December 2012. EBX Group is Brazilian mineral resource company. MUSA is licensed to export iron ore through EBX Group at 3 million tonnes per year in the first phase. MUSA will become able to start large-scale iron ore export after the completion of the port facility in Rio de Janeiro.

MUSA’s export license along the five-year contract with EBX Group is 4 million tonnes in 2013, 8 million tonnes in 2014, and each 12 million tonnes in 2015 and 2016. MUSA holds a right to extend the contract term by maximum 5 years. Thus MUSA has secured export license for next ten years.

MUSA will start iron ore sales appeals to major steel makers, including Japanese steel makers, in order to enlarge the export. MUSA will also increase ore sales to Usiminas if Usiminas launches large-scale upstream capacity expansion projects. MUSA also eyes establishment of a pellet plant in future and the sales to reduced iron makers in the Middle East.

MUSA’s iron ore production is expected to exceed 7 million tonnes in 2011, increasing from 6.8 million tonnes in 2010. The firm will supply 5.5 million tonnes to Usiminas, 1 million tonnes to other Brazilian customers such as Vale, and export 500,000 tonnes in 2011.