Bloomberg News

Vale Wins Brazil Rail License for 1.48 Billion Reais

October 03, 2007

Cia. Vale do Rio Doce, a mining company that is Brazil's second-largest rail operator, won the right to operate a new stretch of the country's North-South Railway in an auction today, allowing it to transport more agricultural commodities.

Vale, the only bidder in the auction, agreed to pay 1.48 billion reais ($810 million) for a 30-year license to run 720 kilometers (447 miles) of railway, according to the Sao Paulo stock exchange. The new section is part of a 4.5 billion-real project to link Brazil's north to its industrialized southeast.

Vale, the world's largest iron-ore producer, is playing a bigger role in transporting agricultural commodities amid rising global demand. Cargo transported by the North-South Railway will rise to 8 million metric tons by 2013 from 1.7 million this year. The route will be used to ship mainly soybeans and corn, said Eduardo Bartolomeo, executive director of logistics at Vale.

``This is a big bet we're making,'' Bartolomeo said. ``This region is where growth is happening.''

Brazil is the world's second-largest soybean grower behind the U.S.

Vale shares fell 2.25 reais, or 4.1 percent, to 52.50 reais as of 10:52 a.m. in Sao Paulo. The stock has gained 94 percent this year.

To contact the reporter on this story: Carlos Caminada in Sao Paulo at at

To contact the editor responsible for this story: Steve Stroth at

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