Vai faltar porto e minério bom: as teses do novo chairman da Cedro

José Carlos Martins, a veteran of the mining industry who previously worked at Vale and CSN, has become the chairman of Cedro to oversee a R$10 billion investment plan. This plan will not only focus on iron ore mining but also on the company's own infrastructure. Having been a consultant for the company since its founding, Martins aims to execute half of this capex by 2030 and will seek partners for this goal.

A stock market listing is not currently part of his plans due to his view that the market has a "negative and distorted" outlook on the sector. He explained in a conversation with Brazil Journal that he doesn't lose sleep over iron ore, as companies like Vale are re-buying their shares, indicating they see the stock as cheap. The market does not see the potential multiple for Cedro to go public, thus listing now would dilute shareholders.

Instead, Cedro is considering funding from private equity funds, both local and international, as well as potential partners. To ensure returns and attract investors, Cedro is betting on high-grade iron ore extraction, up to 68% (above the global reference standard of 62%), and a pellet feed production project in Mariana, Minas Gerais.

This "green" product is used in the direct reduction technique, which uses natural gas instead of coal, reducing carbon emissions in the process. The pellet feed project is budgeted at around R$3 billion and is advancing to the licensing stage. Martins believes in the continued demand for high-quality iron ore, but it must be of better quality.

The scarcity of new mines due to environmental concerns and negative perceptions of the sector is causing an increase in extraction costs and a decline in quality. For example, if you have an ore with 62% iron and it drops to 61%, you need 20-30 million more tons to produce the same amount of iron. Therefore, there's no reason to be concerned.

Despite his confidence in the future of mining, Cedro is concerned about infrastructure bottlenecks in Brazil. Therefore, the company decided to invest in its own port and railway, with capex of R$3.5 billion and R$3 billion, respectively. Martins believes that there will be a shortage of ports in Brazil in the coming years due to the resumption of production at Vale and other mining investments in Minas Gerais.

This "Porto do Meio" will be located between the terminals of Vale and CSN, with a capacity to move up to 15 million tons per year. It will serve as a direct market entry point and to support other miners interested. Two years ago, Cedro secured a 35-year concession for its terminal in Itaguaí (RJ) and plans to install a project with the capacity to handle up to 15 million tons per year.

This will be the "Porto do Meio," situated between the terminals of Vale and CSN. Cedro is preparing for a more likely scenario of port scarcity in the future. The port will allow direct participation in the external market and support other miners with production interests. The railway, a shortline connecting a mining region in Minas to an MRS line, will transport cargo to Sepetiba port.

It will be used by other mining companies that currently transport their production with trucks. Cedro itself does not plan to use the rail line, as it will move its ore using electric conveyor belts to the terminal. All projects are currently in the licensing stage, with the port being in a more advanced stage. Martins acknowledges that Brazilian environmental legislation is quite strict, as it should be. However, he believes it could be more streamlined.