London-based resource group Anglo American (LSE: AAL) and Brazilian logistics company LLX Logistica (Bovespa: LLXL3) have agreed on fixed long-term port tariffs for iron ore shipments from the former's Minas-Rio project.
Under the firms' take-or-pay agreement, valid for 25 years, Anglo American will pay a gross US$7.10/t tariff, which will be readjusted annually by two-thirds of the US Producer Price Index, LLX said in a statement.
Iron ore will be shipped through the LLX Minas-Rio (LLX MR) owned facility at Açu port in Rio de Janeiro, which is part of the integrated Minas-Rio project. Anglo American has a 49% stake in LLX MR.
Payment will be determined monthly based on a volume of 26.5Mt/y, which is the estimated output of Minas-Rio in its first phase. The take-or-pay contract is expected to generate annual revenues of US$190mn for LLX MR, according to the Brazilian firm's statement.
Under the new agreement, LLX MR's investments will be limited to the approximately US$510mn already spent on the terminal together with Anglo American, which contributed 49% of the amount.
Anglo American will invest an additional 1.3bn reais (US$771mn). As a result, Anglo American's total share of the port development cost will be approximately US$1.2bn, the company said in a separate statement.
The companies will equally share any cost that surpasses the terminal's 2.27bn-real capex, according to LLX.
LLX MR will also have the option to take part in any future terminal expansion projects.
Capacity could be expanded to 90Mt/y, Anglo American said in a statement.