Pasadena Company Aims to Cash In On Brazil’s Lucrative Iron Market

Pasadena-based Brazil Minerals said it has received initial positive results from preliminary dry magnetic separation tests on iron samples from a project which the company has signed a six-month option to acquire.

The tests on the company’s Iron Project were performed by an independent laboratory, Brazil Minerals said in a statement.

If further studies confirm a specific cost-effective pathway to concentrate iron based on dry magnetic separation, and if all of the necessary regulatory licensing for operations is eventually obtained, the project could become a producing iron mine, the statement said.

The statement said the company has been looking to enter this endeavor for some time because iron production in Brazil can enjoy high margins. Negotiations for the project lasted over one year.

Iron is sold locally to the Brazilian steel industry, but is also exported. In 2017, Brazil exported over US$20 billion in iron, its second largest export, the company said.

The project is located next to a producing iron mine from an unrelated company, with excellent logistics, paved roads and potential iron buyers nearby, according to the company.

Brazil Minerals will pay an aggregate purchase price of approximately $1 million in installments to complete acquisition of 100 percent of the project, based on the current exchange rate between the Brazilian real and the U.S. dollar.

The title to the Iron Project would be transferred to the company after payment of the first tranche of the purchase price. Brazil Minerals said it has secured funds for the acquisition.

A preliminary estimate of the potential output from the specific portion of the project indicates approximately 6.2 million tons, and mining would be on an open-pit method, the company said.

The highest concentration of iron to date in geochemical studies of samples collected by independent consultants hired by Brazil Minerals has been 46.9 percent, and the average iron content has been estimated at 38 to 40 percent.

The company said preliminary calculations from a local technical expert indicate the potential for a profitable operation, possibly with an annual net profit of up to US$1 million and mine life between 10 to 20 years.