Brazil's Gerdau to invest US$650mn in Minas Gerais mine

Brazil’s largest steelmaker, Gerdau, provided details of its 3.2bn-real (US$653mn) investment plan focused on the Miguel Burnier iron ore mine in Minas Gerais state. 

“All investment in this project will be made with our own resources and we have no intention of postponing these investments, despite the fact that we see some companies in the sectors in which we operate postponing some investments due to the current challenging macroeconomic conditions,” CEO Gustavo Werneck (pictured) told BNamericas.

Meanwhile, SRK Consulting certified 476Mt of proven and probable iron ore reserves in deposits with concession rights at the asset in the Ouro Preto district.

"This level of reserves gives us a lot of comfort that we are making a long-term investment in an asset that will provide returns for our operations," said Werneck, underlining that Gerdau is planning to produce around 5.5Mt/y at the mine.

The 2023-26 investment comprises funds for a crushing and concentration unit, filtering and tailings pile, agglomeration, filtration concentration, the construction of a 13km iron ore pipeline and a 10km tailings pipeline, a new rail terminal and a 138kV energy transmission line.

Around "60% of the projected investments are for mining, crushing, concentration and filtering. Around 20% will be invested in logistics, which will include the iron ore pipeline and the tailings pipeline, along with in the rail terminal. The other 20% will be for several other areas, including the energy transmission line," CFO Rafael Japur told BNamericas.

The Miguel Burnier mine will supply Gerdau's steel units in the state, namely Ouro Branco, Barão de Cocais, Divinópolis and Sete Lagoas.