Eurasian Resources Group wins bid in Brazil to run rail line to boost operations at new mine

London — The Pedra de Ferro iron ore mine in in northeastern Brazil's Bahia state, owned by Kazakhstan-based diversified miner Eurasian Resources Group, has won a bid to complete and operate a railway that will boost the development of the iron ore greenfield.

BAMIN, as the mine is known, won the auction on the Bovespa (São Paulo Stock Exchange) to finish and run the first 537 km (334 miles) stretch of Brazil's FIOL, or East-West Integration, railway. The mine is ERG's first project in Brazil.

The bid follows the start of operations at the mine and the beginning of construction of Porto Sul port facilities in late 2020.

Recent progress in developing FIOL made the commission of the Pedra de Ferro mine possible. BAMIN started commercial production in December, with an initial production capacity of 2 million mt/year of ore with a 65% Fe content while targeting output of 18 million mt/year.

FIOL will provide a low-cost transportation link between ERG's mine in Caetite and its Porto Sul port in Ilheus, both in Bahia state.

Benedikt Sobotka, ERG CEO, said the auction win for the railway project represented a milestone for the company's ambition to respond to growing demand for a host of commodities, including iron ore, sustainably and responsibly.

Sobotka said in a statement that the business plays a role in Bahia's socioeconomic development, "and the addition of the FIOL railway marks an achievement for our integrated portfolio of mining, processing, energy, logistics and marketing operations."

Erik Gaustad, BAMIN's chairman, said, "FIOL Stage 1 together with our Porto Sul project will have a transformative impact on the region, providing environmentally safe and reliable logistics for mining, agriculture and a range of other industries."

According to Gaustad, FIOL is key to enabling the expansion of Pedra de Ferro production to 18 million mt/year and to position the mine as a low-cost supplier of high-quality iron ore globally.

ERG produces iron ore and other minerals in Kazakhstan and non-ferrous metals in Africa.