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Honbridge unit to build US$2.2B iron ore complex in Brazil

Honbridge Holdings Ltd. unit Sul Americana de Metais S/A signed a protocol of intent with Brazil's Minas Gerais state to build the Block 8 iron ore complex worth 9.1 billion Brazilian reais, or about US$2.2 billion, Reuters reported Sept. 15, citing newspaper O Estado de Sao Paulo.

The deal includes an 845-million-square-meter tailings dam, which would be about 70 times larger than the one that burst at Vale SA's Feijao iron ore mine in January, the report said. Sul Americana insisted that the model for its dam is safe.

In 2015, Honbridge sought for arbitration over the termination of a share purchase agreement related to the project. According to Sul Americana's website, the company restructured the project's business model in 2017 and included major optimizations to reduce its environmental impact.

Block 8 is expected to produce 30 million tons of pellet feed per year. An environmental review is ongoing, the company said on its website.

As of Sept. 13, US$1 was equivalent to 4.06 reais.