BAMIN, wholly owned by Eurasian Resources Group (ERG), has signed a concession agreement to complete and operate a stretch of the FIOL (East-West Integration) railway in Brazil.
BAMIN will advance the construction works, which until recently were carried out by Valec, the state-owned railway engineering and construction company.
The sub-concession has been granted for a 35-year period, which includes an allowance of five years for the construction of the railway and 30 years for its operation.
BAMIN said its investment into the railroad and the rolling stock will amount to approximately R$3.3B (US$683M).
In April 2021, BAMIN won the auction on the B3 (São Paulo Stock Exchange) to complete and operate the first 537 km stretch of the FIOL. The concession agreement has now granted BAMIN 120 days to evaluate the progress of the construction and other related works. This preliminary phase precedes the preparation of a plan to resume the construction, which is scheduled for the second half of 2022.
Tarcio Gomes de Freitas, minister of infrastructure of Brazil, said: “The importance of this infrastructure project in the State of Bahia cannot be overstated. The project is very well structured and includes an iron ore plant, a railway and a seaport.
“The railway, which is undergoing construction, will serve the mining industry, as well as the agricultural sector, which is growing at an unprecedented pace, particularly in the west.”
BAMIN said it has already hired experienced professionals in the rail industry who will oversee the management of the FIOL railway. BAMIN added that it will also leverage ERG’s international expertise as the largest transport operator in Central Asia with extensive experience in rail transport.
Each year, ERG transports over 50 Mt of freight using 10,000 vehicles, while also maintaining and repairing 2,500 wagons and over 1,000 locomotives.
The signing ceremony, which was held at Sussuaran in the Tangua Municipality, was attended by Brazilian President Jair Bolsonaro, infrastructure minister Tarcicio Gomes de Freitas, national land transport agency director General Rafael Vitale, Bahia state governor Rui Costa, André Coon, president of Brazil’s state-owned railway engineering and construction company Valec, as well as other federal and local government representatives, ERG’s CEO Benedikt Sobotka and BAMIN’s CEO Eduardo Ledsham.