Samarco's $1.18 Billion Project Set for Completion on April 18

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Researched by Industrial Info Resources (Sugar Land, Texas)--Samarco Mineracao S.A. (Belo Horizonte, Brazil), a joint venture between Vale (NYSE:RIO) (Rio de Janeiro, Brazil) and BHP Billiton Limited (NYSE:BHP) (Melbourne, Australia), is set to commission its third pellet plant on April 18, 2008. The $1.18 billion project encompasses the construction of a second concentrator plant ($275.6 million), a second pipeline ($295.1 million) and a third pelletizing plant ($600 million). The investments also entail the expansion of the equipment and infrastructure facilities in the mining and port areas, worth about $12 million.

The concentrator plant is at the Germano site in the Alegria mining complex of Minas Gerais, where the iron ore itabirite is mined, grounded and concentrated. The plant will have an annual output of 7.5 million tons. This additional beneficiated ore will be carried in the form of slurry through a new 400-kilometer pipeline that is being constructed parallel to the existing pipeline. The pipeline will carry the slurry from the Germano mine to the pelletizing plants in Ponta Ubu. At full production capacity, the new pipeline will transport 16.5 million tons per year in addition to the current 13.5 million tons per year. The third pelletizing plant is being constructed next to the two existing plants at Ponta Ubu in Espirito Santo. The plant will have an annual pellet production capacity of 7.6 million tons. The project's main service suppliers include Outokumpu Tecnologia Brasil (Belo Horizonte, Brasil), which is in charge of the supply of the pelletizing furnace on a turnkey basis, and Techint Italimpianti do Brasil (Sao Paulo, Brazil), which is in charge of assembling the pipeline.

The additional capacities will allow Samarco to produce and pump 24 million tons of concentrate a year from Germano, producing and shipping out 21.6 million tons of pellets and 1 million tons of iron ore fines. The project represents a 54% increase in the company's production, enabling Samarco to secure its position as the second-largest iron-ore-pellet exporter in overseas markets.

Vale, one of the world's largest iron ore and pellet producers and exporters, produces nickel, manganese, ferroalloys, aluminum, gold, kaolin, potash, fertilizers and copper, among other things. BHP Billiton is an exporter of metallurgical coal for the steel industry, an exporter of energy coal, a producer of iron ore, copper, primary aluminum manganese and chrome ferroalloys. It also has substantial interests in oil, gas, liquefied natural gas, nickel, diamonds, silver and titanium minerals.

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