Agnelli, former Vale executive, creates his own mini-Vale.
The executive presented his project to investors at an event in Belo Horizonte and said he intends to produce 30 million tons of ore in five years.
By Jeb Blount
BELO HORIZONTE, Feb 22 (Reuters) - B&A Mineração expects to produce 30 million tons of iron ore annually within five years, but the main source of revenue for the company, created by former Vale president Roger Agnelli in partnership with BTG Pactual, will come from fertilizer production, executives said on Friday.
The joint venture aims to produce 500 tons of potassium and 1 million tons of phosphate per year within five years, said the company's president, Eduardo Ledsham, at an event in Belo Horizonte to introduce the company to authorities, journalists, and participants in the mining sector.
In December, B&A Mineração made a proposal to acquire all of Rio Verde Mineração, a Canadian company with fertilizer projects in Brazil. The company already owned 30 percent of the company's capital.
Agnelli's company inherited phosphate deposits in Pará, Maranhão, and Ceará from this acquisition. One of them is a phosphate mine in Rio Bonito, Pará, which will begin production in September, with an estimated volume of 150 tons/year.
Agnelli said at the event that he is betting on one billion people joining the middle class worldwide in the next seven years, which will increase demand for his company's products. He also highlighted the potential growth of agricultural areas in Brazil and Africa, fueling fertilizer consumption.
The company also established a presence in potassium reserves in Sergipe, in the municipality of São Cristóvão, where research showed good potential for the mineral.
In addition to fertilizers and iron ore, the company plans to extract 200 tons of copper annually within five years.
BTG Pactual, Brazil's largest independent investment bank, has joined forces with Agnelli with plans to invest up to $520 million in mining through acquisitions and projects, according to a statement released by André Esteves's institution in July.
SIMANDOU
The company president ruled out interest in the Simandou iron ore project in Guinea.
"We are in talks with BHP about the Nimba project; we have no interest in Simandou, which already has two strong partners," said the executive, referring to Vale and BSG Resources (BSMR).
Sources familiar with the deal told Reuters in November that Agnelli's company was among the bidders to buy BHP Billiton's stake in the Nimba iron ore project in Guinea.
Other bidders for the stake in the joint venture that holds the concession for the Nimba mine include the world's largest steelmaker, ArcelorMittal, which has a nearby mine across the border from Liberia, the sources said.
It is said that Agnelli's company is acting as an advisor to the Guinean government at a time when the authorities are reassessing the concession process for the Simandou deposits, a gigantic iron ore reserve whose exploration rights are being questioned.
Vale, one of the companies with a stake in the business, decided to remove the project from its business plan.
A few years ago, while at the helm of Vale, Agnelli pushed the mining giant into Guinea for a controversial acquisition of a stake in iron ore assets that included blocks of the Simandou deposit confiscated from rival Rio Tinto.
(By Jeb Blount)