Sao Paulo, Brazil, 30 May – Brazilian mining company, Companhia Vale do Rio Doce (CVRD) said Monday it had sold its 50 percent stake in Bahrain’s Gulf Industrial Investment Company (GIIC) for US$418 million.
The sale of the stake to GIIC itself aimed to “solve differences of opinion,” in managing the company,” CVRD said in a statement.
“CVRD and GIIC, the holder of the remaining 50 percent of the capital entered into a mandatory buy-sell agreement to solve differences,” the world’s largest producer fo iron ore said.
Last year, GIIC produced 4 million tons of iron ore pellets, which represented just 7.1 percent of the total 56.4 million tons produced by the Brazilian company.
The supply of the product to the company’s Middle Eastern customers would be continued directly through CVRD’s units in Brazil, the statement said.
Last week, CVRD announced an agreement for a 19 percent increase in the price of iron ore this year, with European, Taiwanese and Korean companies.
China’s steel-working companies are still not prepared to accept the price rise of iron ore, which was justified by the increase in value of the Brazilian real against the US dollar over the last 12 months.
Last year the Brazilian mining company presented a proposal for a 90 percent price increase, but lowered it to 71.5 percent, after drawn out negotiation with foreign steel companies.
Currently, CVRD is also developing a coal mining project in Moatize, in the Zambezi River region of Mozambique, where it won an international tender in 2004. (macauhub)