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Brazil’s Mining Company Samarco Makes Over US$ 1 Billion Exporting All Its Production

As well as the appreciation in prices of their products abroad, the Brazilian mining company Samarco also placed their bets on market diversification to ensure record revenues of US$ 1 billion achieved between January and November.

Before the end of the year, the company foresees that their revenues will reach US$ 1.1 billion. They produce iron pellets and iron ore pellet feeds, which are raw materials for ironworks.

"We made a geographical redistribution of our sales to reduce regional risks," stated the marketing manager at the company, Luiz Ricardo Cunha Melo.

There was a very high business concentration in some markets such as China, which came to represent 45% of the company’s sales in 2003. "We were very dependent on one market alone," he added.

As of then, the company started working to expand their presence in other places, like the Middle East and North Africa. Countries in the region, as Libya, Egypt, Saudi Arabia, Qatar and Bahrain, currently take in about 25% of Samarco’s production, against 18% in 2003. The company exports all that is produced.

The Arab countries only lose to China as destinations for Samarco’s goods. The Asian country is still the main buyer, however its share of the total dropped to 30%. Then there is Europe, with 18%, countries in the Americas, with 12%, and the rest goes to other nations in Asia.

"There is an important growth in the ironworks sector taking place in the Arab countries, with many projects already in operation and others under development," stated Melo.

"And we have great interest in participating in this growth," he added. According to him, there is a direct relation between the increase in oil prices and the increase in demand in the region.

The company, however, is in the limit of its production capacity. Because of this, the partners decided to make an investment of more than US$ 1.1 billion to increase the production capacity in 54%. The new industrial and logistics installations should start operating in 2008.

Before the end of the year, Samarco should produce 14 million tons of pellets and 1.6 million tons of pellet feeds. The company employs 1,325 people and belongs to the Brazilian mining giant Companhia Vale do Rio Doce and the multinational BHP Billiton.

Anba – www.anba.com.br

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