July 16, 2012

Brazil's BTG Pactual teams up with AGN Participacoes on mining venture

A new mining venture is being set up with the teaming up of Brazil's investment bank BTG Pactual with AGN Participações, an investment firm owned by former Vale ceo Roger Agnelli.

The new venture will develop iron ore, copper and fertiliser projects in Latin America and Africa. BTG will initially invest US$520 million in the miner, named B&A Mineração, to develop green field and existing projects through partnerships with small and medium miners. "But this amount can be lifted as new mining opportunities appear," BTG's merchant banking partner Carlos Fonseca told reporters during a press conference on Thursday, July 12.

Around 10% of this initial sum has already been spent. Agnelli is the chairman of B&A Mineração, while Eduardo Ledsham is the CEO. Ledsham worked with Agnelli at Vale, where he served as exploration director. Apart from Brazil, the company also plans to explore iron ore opportunities in Chile and Peru in Latin America, and Angola and Mauritania in Africa.

"The demand for natural resources will continue to grow, and Africa has to increase its mineral and energy offers to meet these needs," Agnelli said.

B&A Mineração's first projects are expected to come on stream within three to five years. Ledsham did not rule out the possibility of establishing partnerships with steelmakers to jointly develop iron ore projects in the Brazilian market.

"We are open to talks, but it is premature to affirm anything," he said.

B&A Mineração already controls a copper joint venture in Chile with local producer Cuprum Resources, with start-up scheduled for 2014, according to Ledsham. It also owns a stake in Brazil's fertiliser producer Rio Verde, he added. The miner will also look at the Argentinian and Colombian markets to establish new mining projects in those countries, but this is part of a long-term strategy.