Vale informs that it has received the installation license (LI), issued by the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (IBAMA), for the expansion of the Carajás railroad (EFC), which connects Vale's mining operations in the state of Pará to the Ponta da Madeira maritime terminal in the state of Maranhão, Brazil.
The LI, along with the simultaneously issued Authorization of Removal of Vegetation (ASV), permits the beginning of capacity expansion of the EFC to 230 million metric tons per year (Mtpy), an important component of the CLN S11D project, which in turn will provide the extension of the logistics infrastructure required to support the 90 Mtpy Carajás Serra Sul S11D iron ore project.
The LI enables railworks of 786 km and includes, among others, the duplication of 559.7 km of railway. The conclusion of the project is expected for 2017.
In this way, the issuance of the LI is a landmark in S11D's execution process, which involves US$ 19.5 billion in total investments, of which US$ 8.1 billion for the iron ore mine and trimodular processing plant, and US$ 11.4 billion for the expansion of railway and maritime terminal logistics infrastructure.
The initial ramp up of iron ore production is expected for the second half of 2016 and operation at full capacity should occur at the end of 2017. The additional 90 Mtpy capacity's operational cost - mine, plant, railway and port - should be extremely low and will create future brownfield expansion opportunities with likewise very low investment costs.
The more than 90 environmental licenses obtained by Vale this year are allowing not only the continuation of the company's mining and logistics operations in Brazil, but more importantly enable an step change in the quality and quantity of its future iron ore production at operational costs below current levels. Such developments will guarantee the unchallenged leadership of Vale in the global iron ore market.