Aug 23, 2012

The board of directors of the BNDES approved R$ 3.882 billion in financing for Vale S/A. The funds will be used to implement the North Logistics Capacity-Building (CLN) project, which was created to implement a 30.4% expansion of the transport capacity and shipment of iron ore from Vale's Logistics System, which covers the Carajás Railroad (EFC) and the rail and maritime terminals in Ponta da Madeira, in the states of Pará and Maranhão.  With this, the CLN will have a capacity of 150 million tons per year (Mtpa).

The BNDES will finance 52.3% of the project, whose total investments reach R$ 8 billion and includes the duplication of approximately 115 kilometers of the EFC, the acquisition of locomotives and wagons, the construction of a new pier (southern part of Pier IV), and expansion of the marine terminal yards at Ponta da Madeira.

The logistic expansion will accompany the increase in the capacity for mining operations in Carajás, boosting the company's competitiveness in the sector. Brazil is the second largest producer of iron ore in the world, and the railroads and ports are an important differential in reducing the cost of the ore, since the Carajás mines are far from major Asian consumers, particularly China and Japan.

The BNDES’ financing to the CLN 150 Mtpa project will have direct impact not only on the production of Brazil’s machinery and equipment industry - with orders for wagons from domestic suppliers – but also on the growth of employment in the region. Fifteen thousand jobs will be created during the works, and 1,600 direct and indirect jobs will be generated during the logistic operation stage. The project also brings benefits to the surrounding population, due to investments in the railroad and nearby areas. 

Social programs – Vale will allocate R$ 95 million to social efforts in support to public administration, infrastructure, human and economic development, conducted in 24 municipalities in Maranhão and Pará. Initiatives include training and qualification of the work force, investments in sanitation, paving, housing and programs focused on health, education as well as employment and income generation.

Part of the social investments, not required by law, will be supported by the BNDES through the Business Social Investments line of credit. Priority will be given to efforts in municipalities with low social indicators in the area impacted by the railroad, with a focus on basic education and health, as well as employment and income generation.