OREANDA-NEWS. August 17, 2011. MMX, Eike Batista’s EBX Group mining company, disclosed on July 13 the signing of a preliminary nonbinding agreement with Minerinvest Mineracao, setting the ground-rules for the negotiation of contracts to handle 5 million tons of iron ore at the Sudeste Superport. Minerinvest will also provide another 5 million tons of iron ore. The volumes are annual and are subject to a take-or-pay clause of 80%. The contract will be valid for ten years. The negotiation must still be approved by the Board of Directors of MMX and by Minerinvest.

Port Services

MMX will handle up to 5 million tons of iron ore from Minerinvest annually for ten years, as from the beginning of operations of the Sudeste Superport. For this, Minerinvest will pay USD  19.77 per ton. The tariff will be adjusted based on the price of iron ore as from the second quarter of 2011, with a minimum price set at USD  15.90 per ton.

With the signing of the contract, the holders of PortX variable compensation bonds based on royalties (Bovespa: MMXM11) will be entitled to receipt of payment of royalties of USD  5 per tonover whichever is greater: volume handled or volume of take-or-pay.

Supplying of iron ore

Minerinvest will sell up to 5 million tons of iron ore per year to MMX at a price of USD  64 per dry ton with 63.5% ferrous content, which will be delivered at an MRS railway terminal. The purchase price of the ore will be readjusted in line with the change in the price of the product in the international market. The basis will be the price in the second quarter of 2011 and the floor established for the agreement isUSD  30 per ton. The contract, valid for 10 years as from the start-up of operations of the Sudeste Superport, also provides that MMX will sell up to 40% of its annual volume (2 million tons) to an important European steel producer, at market price.