MMX Board Approves Lease, Possible Sale of Corumba Iron Ore Mine
Brazil's MMX said late Wednesday it approved the lease and possible sale of its Corumba, high-grade iron ore unit, part of efforts to raise cash and restructure the troubled mining company controlled by Brazilian tycoon Eike Batista.
The Rio de Janeiro-based company, formally known as MMX Mineracao e Metalicos SA, did not name the person or company that has agreed to lease the mining rights of its MMX Corumba unit in Brazil's Mato Grosso do Sul state near the Bolivian border.
The plan was approved by the MMX board, the company said in a securities filing.
MMX shares rose 0.55 percent in late-morning trading in Sao Paulo Thursday, putting the stock on track for its biggest one-day gain in nearly two weeks.
Last week, MMX officials said that a decline of more than one-third in the price of iron ore <.IO62-CNI=SI> in the last 10 months has made it harder for the company, part of Batista's troubled EBX Group mining, oil, energy, port and shipbuilding empire, to find new partners.
MMX is seeking new capital to complete its Serra Azul and Bom Sucesso mine projects in Brazil's southeastern state of Minas Gerais.
Despite Corumba's high-grade ores, including lump ore, which can be fed into a steel blast furnace with little or no processing, MMX Corumba's location far from the ocean has limited the company's ability to sell its product and raised the cost of delivering it to market.
Operations at Corumba, which produced 1.4 million tonnes of ore in 2012, were suspended last year to save cash.
The widely fluctuating water levels of the largely un-improved waterways on the Paraguay and Parana rivers have often limited MMX's transport options, which require it to ship its ore by river barge to Argentina, where is its loaded on ocean-going vessels from transport to clients.
(Reporting by Fabiola Gomes and Jeb Blount; Editing by Marguerita Choy)