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Finally, the government and Vale close an agreement worth R$10 BILLION to boost railway development in Brazil!

Written by Roberta Souza
Published 20/08/2024 às 21:00
“ministry of transport”, “railroad”, “valley”, “investment”, “renan Filho”
photo/reproduction: worth

Renan Filho confirms that negotiations could exceed R$10 billion, aiming for a new cycle of investments in railways!

A billion-dollar deal between mining company Vale and the Brazilian government is about to be closed, with expectations that the value will exceed the $ 10 billion. This amount will be fundamental for the launch of a new national plan aimed at the development of railways in Brazil. According to the Minister of Transport, Renan Filho, this initiative aims to ensure that the country has a solid plan, with clearly defined sources of resources, avoiding old projects that remained only on paper due to lack of financing, according to cnnbrasil.

Agreement with Vale: towards a new investment cycle

Minister Renan Filho revealed, in an interview with CNN, that negotiations with Vale, related to renewal of its railway concessions, are advanced and should result in an agreement worth over R$10 billion. This value is seen as crucial for strengthening the railway sector, as it will be added to other additional concession payments, such as those for Rumo and MRS Logística.

This agreement not only seeks to correct grant values ​​considered low in previous negotiations, but also to support a national plan for the development of railways. “No more plans that remain only on paper“, stated the minister. The intention is to ensure that new railway works have specific sources of financing, making them viable and effective for freight transport in the country.

Impacts on the rail and road sector

In addition to the expected agreement with Vale, Renan Filho announced that the government intends to carry out 12 to 13 highway auctions in the coming months, in what could be considered the largest cycle of highway concessions in Brazilian history. Among the projects, the concession of the BR 381, in Minas Gerais, known as “Highway of Death“. The stretch, which has already gone through two auctions with no interested parties, was restructured to increase its attractiveness and guarantee competition.

“ministry of transport”, “railroad”, “valley”, “investment”, “renan Filho”
photo/reproduction: the gazette

The minister explained that the restructuring involved the exclusion of urban lots and the mitigation of geological and demand risks, in addition to increasing the project's internal rate of return. These measures were taken to make the auction more competitive and ensure that the concession finally gets off the ground.

Vale's role in the expansion of railways

Vale, one of the largest mining companies in the world, plays a fundamental role in the expansion of railways in Brazil. Its concessions, such as Carajás Railway (FCA) and Vitória-Minas Railway (EFVM), are vital for the transport of iron ore and other essential cargo. The renewal of these concessions, which is now in the final negotiation phase, is seen as an opportunity to guarantee significant investments in the sector.

Renan Filho highlighted the importance of concluding negotiations with Vale, stating that the government is thoroughly analyzing the mining company's proposals to ensure that the agreement is fair and benefits the country's railway development. “We are committed to closing this deal and turning this page“, said the minister, signaling the urgency of moving forward with investments in railway infrastructure.

Next steps: strategic investments for the future

With the agreement between Vale and the government about to be finalized, Brazil is preparing for a new cycle of investments in railways. These investments are essential for improving transport infrastructure, reducing logistics costs and boosting the country's economy. The government's plan, which promises to be “credible” and effective, aims not only to build new railways, but also to modernization and expansion of existing ones.

The success of these initiatives will depend on the commitment of concession companies, such as Vale, to carry out the agreed investments, and of the government to ensure that resources are applied efficiently. If everything goes as planned, Brazil could see a significant transformation in its railway network in the coming years, with positive impacts for the logistics sector and the economy as a whole.

Get ready, because Brazil's trails are about to receive a new boost!

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Roberta Souza

Petroleum Engineer, postgraduate in Commissioning of Industrial Units, specialist in Industrial Corrosion. Get in touch to suggest an agenda, advertise job vacancies or advertise on our portal. We do not receive resumes

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