Bloomberg News

Miner MMX Jumps After Signing Iron Transportation Agreement

December 29, 2011

(Updates with value of agreement in first paragraph, closing price in second paragraph.)

Dec. 29 (Bloomberg) -- MMX Mineracao & Metalicos SA, the iron-ore miner controlled by billionaire Eike Batista, rose to a three-week high after signing a $5 billion shipment agreement.

MMX advanced 3.3 percent to 6.67 reais at the close of trading in Sao Paulo, the highest since Dec. 6.

MRS Logistica SA will transport about 36 million tons of ore from mines to the Sudeste Superport each year for 26.463 reais per ton ($14.13), according to a regulatory filing yesterday. The price is in line with the $14 per ton fee forecast by analysts at Santander, makes the company’s mining project less risky and will help MMX grow, the analysts wrote. The value of the contract is about $5 billion over its 14-year term, Raphael Biderman, an analyst at Banco Bradesco SA, wrote in an e-mail message.

“Now we have confidence that the rail transportation from the mine to the port is in place,” Felipe Reis, a Santander analyst in Sao Paulo who has a “buy” rating on the shares, said by phone today. “This is one less topic to be concerned about and it shows the company is moving towards delivering on what it has planned to become.”

--With assistance from Fabiola Moura in New York. Editors: Brendan Walsh, Richard Richtmyer

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net


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