Vale weighs no-cash role in Porto Sudeste bid

Vale is exploring a structure that would allow it to support a bid for Porto Sudeste, in Rio de Janeiro state, without making a direct cash investment in the acquisition, Valor has learned.

One option under consideration is a long-term take-or-pay agreement under which the Brazilian mining giant would guarantee minimum iron ore volumes for the terminal even if it did not fully use the capacity it contracted.

Such a commitment would give Porto Sudeste greater revenue visibility, helping the prospective buyer value and finance the acquisition. The arrangement could also reduce potential antitrust concerns because Vale already operates port infrastructure in Itaguaí, Rio de Janeiro.

Under the structure being discussed, Vale would back the bid led by Global Infrastructure Partners (GIP), the infrastructure manager controlled by BlackRock, and Brazilian steelmaker Gerdau, without necessarily taking an equity stake in the terminal. No final structure has been agreed, and the volumes and duration of a potential contract remain under negotiation, people familiar with the talks said.

Vale initially participated directly in the consortium with GIP and Gerdau, which submitted one of two binding bids for Porto Sudeste.

The other offer came from U.S. infrastructure investor I Squared Capital, which has sought to acquire port assets in Brazil in recent years without success. Its previous targets included Wilson Sons and CLI, or Corredor Logística e Infraestrutura. I Squared already owns energy and data-center assets in Brazil.

Antitrust concerns

Vale’s potential equity participation in Porto Sudeste has raised concerns among rivals and questions over the competition implications of the transaction, people close to the discussions said.

The Brazilian miner already controls significant port infrastructure for iron ore exports in Rio de Janeiro through the Ilha Guaíba Terminal and the Companhia Portuária Baía de Sepetiba terminal.

Against that backdrop, participants in the sale process have been assessing whether Vale’s acquisition of another terminal could draw scrutiny from Brazil’s antitrust watchdog, Cade.

Porto Sudeste serves iron ore producers in Minas Gerais, including companies without their own export infrastructure, and provides an alternative to terminals vertically integrated with large mining groups.

Replacing an equity investment with a take-or-pay contract could reduce the competition risks associated with Vale taking a direct stake in Porto Sudeste. Even that arrangement, however, could still face Cade review depending on the length of the agreement, the volumes reserved for Vale and its impact on access for other miners.

One person familiar with the matter said that if the volume guaranteed to Vale were large enough, the competitive impact could effectively be the same as if the company held an equity stake.

Itaguaí precedent

The debate echoes the controversy surrounding ITG-02, a new iron ore terminal at the Port of Itaguaí in the same region of Rio de Janeiro.

The site is known as the “Área do Meio,” or “Middle Area,” because it lies between terminals operated by Vale and CSN. Smaller miners that relied on vertically integrated infrastructure to ship their output had argued that the area should be made available to them.

Brazil’s waterways regulator, Antaq, had proposed restricting the participation of certain companies in the auction. In 2024, however, the Federal Court of Accounts (TCU) ruled that such a restriction would require a prior opinion from Cade.

The limitation was removed, and the antitrust authority ultimately did not issue a ruling on the matter. Vale and CSN did not take part in the auction, which was won by Cedro Participações, the only bidder.

Port capacity

Located in Itaguaí, Porto Sudeste can handle about 50 million tonnes a year and is licensed for a future expansion to 100 million tonnes.

The terminal handled a record 27.8 million tonnes in 2025, up from 21.9 million tonnes a year earlier. Part of its unused capacity could be filled by a future agreement with Vale.

Mubadala Capital and commodities trader Trafigura have been discussing a sale of the asset since at least 2024. The process also includes Mineração Morro do Ipê, owner of the Ipê and Tico-Tico mines in Minas Gerais. The sellers aim to complete the transaction this year.

Industry sources describe Porto Sudeste as an attractive asset, citing strong long-term demand potential and dollar-denominated revenue.

Still, they point to its current dependence on iron ore shipments, Morro do Ipê’s importance in filling the terminal and volumes that have fallen short of earlier expectations as drawbacks.

Earnings pressure

More recently, the company reported weaker-than-expected results that still require further explanation, market sources said.

Porto Sudeste do Brasil posted net revenue of R$2.7 billion in the first half of this year, down 22% from a year earlier. Its loss widened to R$1.4 billion from R$285 million in the same period last year.

Stonepeak, which had been evaluating the acquisition alongside Australia’s M Resources, has dropped out of the process and did not submit a binding bid. Its withdrawal has already been formally communicated to the sellers.

A person close to the transaction said the infrastructure manager had not been viewed as one of the leading contenders for the asset.

Asked for comment, Vale reiterated a statement released on April 30 saying it evaluates investment opportunities in the ordinary course of business in line with its strategic priorities.

The company added that capital-allocation decisions go through a rigorous assessment process and follow its policies and governance rules. Vale also said it would keep the market informed of any material developments arising from such opportunities or related to its business.

Mubadala, Trafigura and I Squared declined to comment.

*By Fernanda Guimarães and Taís Hirata — São Paulo

Source: Valor International

https://valorinternational.globo.com/