Mining Company Vale Will Begin Railway Construction In Mato Grosso In May, With An Expected Investment Of R$ 2.73 Billion

The Midwest Integration Railroad (Fico), in Mato Grosso, Will Begin Its Works Next Month; The Contractor for the Services Will Be the Mining Company Vale

The Midwest Integration Railroad (Fico), in Mato Grosso, will begin construction in May. The railroad, planned for over 10 years, will be executed by the mining company Vale, which is expected to invest about R$ 2.73 billion in Fico, with an estimated completion time of four years. The works will extend from the state of Goiás to the state of Mato Grosso.

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Mining Company Vale Will Execute Railroad Works

The construction project will begin in the city of Mara Rosa, in the state of Goiás, where the tracks will connect to the already operational North-South railway network. From there, Fico will cover a distance of 383 kilometers towards Mato Grosso, reaching the city of Água Boa.

The mining company Vale will be responsible for the execution of the railroad works in Mato Grosso and Goiás. The company signed a contract with the Federal Government at the end of last year and expects to invest R$ 2.73 billion in Fico over the estimated four years for completion.

Contract Between Vale and the Government

The signing of the contract between Vale and the Ministry of Infrastructure is due to the government’s decision to allow current railroad concessionaires in the country to renew their contracts early. The proposal has been under study since 2017, authorizing a 30-year concession in the 1990s – the concession only expires between 2026 and 2028 – and is now extended for another 30 years. In return, these companies, in addition to the so-called “cross investment,” also commit to expanding the networks they already operate.

The mining company Vale agreed to undertake the railroad works after obtaining authorization to renew two concessions already operated by its logistics companies, the Vitória-Minas Railway in the Southeast Region of the Country, and the Carajás Railway in Maranhão. When the company completes the works, it will hand over the project to the government, which will conduct an auction, and the railroad operations will be carried out by any company interested in that route.

Vale confirmed, via a statement, that it has started activities related to the pre-implementation of the works, including field exercises, development and implementation of projects, and hiring engineering companies. The mining company stated that at the same time, it is awaiting the Federal Government’s responsibility to provide the land for the first 30 kilometers of the railroad to initiate the next phase of the railway infrastructure construction project.

Improvement in Mato Grosso’s Logistics

The new railway network is expected to help relieve some pressure on Mato Grosso’s two main grain export routes, the BR-163 and BR-158 highways. This year, as with the previous BR-163, the BR-158 has garnered national news, with stretches of poor soil and endless truck congestion, and today, rail transport accounts for about 15% of the country’s cargo volume.

The current target of the national logistics plan aims to achieve a participation rate of 30% by 2025. Brazil’s goal is to transport 0.6% to 0.8% of all products produced in the country each year. To minimize the improvement of current logistical conditions, this proportion must be raised to 2.5% of GDP.