24 Aug Brazil’s Cosan to move into iron ore mining following JV deal
Brazilian energy group Cosan SA is set to enter the mining industry after striking a joint venture (JV) arrangement with the controlling shareholder of TSX-listed Aura Minerals.
In a securities filing, Cosan announced that the new JV entity will explore and transport iron ore in Brazil, after iron ore prices reached a record high in the first half of 2021.
Paulo Brito Group, founder and controlling shareholder of multinational miner Aura, will co-control the new company, which will be headed by former Vale SA and CSN SA executive Juarez Saliba de Avelar.
Cosan said it has also agreed to acquire the Sao Luis port company for the JV at a price of US$134 million from China Communications Construction Company. The port will be used to evacuate iron ore.
In addition, the JV will own exploration rights for mining assets in three mineral projects in Brazil’s Northern state of Para, in the same region where mining giant Vale operates a cluster of assets. The JV’s first mineral project is expected to start operation in 2025.
This is the first of a series of investments Cosan plans to make through a newly launched investment fund, which may invest in new areas using the company’s capital as well as third parties. Cosan’s portfolio includes recently listed energy firm Raizen SA and gas company Compass.