According to the Wall Street Journal, Brazilian iron-ore miner MMX Mineracao e Metalicos SA acquired control of sister company PortX Operacoes Portuarias SA, allowing it to fully integrate its mining, port and shipping operations and to offer port services to third parties.

MMX, controlled by Brazilian billionaire Eike Batista, acquired 92.28% of PortX, which is also controlled by Mr. Batista, in an auction worth a total of 6.34 billion Brazilian reais ($3.96 billion) on Brazil's Bovespa stock exchange Friday, according to a BM&F Bovespa statement.

This followed MMX's recent public tender offer for shares in PortX, a spinoff from another company controlled by Mr. Batista, LLX Logistica SA, said the Dow Jones Wires.

MMX will ship iron ore it produces in Minas Gerais state, southeast Brazil, through the Sudeste port in Rio de Janeiro state which is being developed by PortX. The port is due to start operations in 2012, said Wall Street Journal.

According to the Journal, MMX Chief Executive Roger Downey said earlier this month the company may strike new partnerships allowing it to ship from Sudeste ore that is produced by other miners in Minas Gerais. This follows a joint mining-and-shipping partnership recently struck between MMX and steelmaker Usinas Siderurgicas de Minas Gerais SA, or Usiminas.

MMX said in a statement late Friday that it will issue 33.26 million new ordinary shares, worth around 464.5 million, reais following the PortX acquisition. This will increase MMX's total capital to 4.036 billion reais, reported the Journal.

PortX's existing shareholders, who include Mr. Batista, will gain royalties certificates traded on the Bovespa exchange, in addition to cash or payment in MMX shares for their PortX holdings, MMX said.

The royalties certificates, whose value is linked to iron-ore prices, will start trading on the Bovespa exchange May 24 under MMXM11, along with the new shares being issued by MMX, the company said.

Mr. Downey said in the statement that the acquisition of Sudeste port is a milestone in MMX's history.  Conclusion of the public offer consolidates MMX as an integrated mining company with a port that boosts operational competitiveness and gives greater access to the seaborne market, said Downey.

Deepwater Sudeste port will initially have the capacity to ship 50 million metric tons a year of iron ore when it starts operations in 2012. It may eventually be expanded to a capacity of 100 million tons a year, to ship iron ore produced both by MMX and other mining companies in the region, Mr. Downey said.

24th May 2011