Usiminas terminates iron ore transport contract with MRS Logística
Brazilian steelmaker Usiminas and logistics firm MRS Logistíca agreed to suspend a contract for transporting iron ore from the former's mining arm Mineração Usiminas (Musa) along the latter's railways.
Under the agreement, Musa will pay 316mn reais (US$82mn) in 10 annual installments as compensation to MRS for investments carried out to expand the railway, the logistics company said in a filing to securities watchdog CVM.
The suspension is linked to Usiminas' decision to end steel output at its Cubatão plant, which used Musa's iron ore to produce steel plates, daily Diário do Comércio reported.
Another factor was the suspension of Musa's iron ore exports, which used the MRS railroad, as a result of the slump in the commodity's price, the report said.
Last June, Musa decided to unilaterally end its shipment contract with Rio de Janeiro's Sudeste port, where Usiminas had a take-or-pay agreement of US$12.63/t with Sudeste's controllers.
Musa is a 70:30 JV between Usiminas and Japan's Sumitomo. The company has four iron ore deposits in the Serra Azul region, in Minas Gerais state, with reserves of 2.6Bt and an expected mine life until 2045.
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