East China Mineral Exploration and Development Bureau (ECE) is expected to acquire an iron ore mine in Brazil, the 21st Century Business Herald reported Thursday.
The ECE signed an intent agreement with Bernardo de Mello on March 25, offering $1.2 billion to buy the entire property rights of the Jupiter project in Minas Gerais of northeastern Brazil, where most of Vale's iron ore mines are located.
The deal is likely to be completed by the end of the year, Shao Yi, head of ECE told the paper.
ECE will seek domestic strategic partners on the project, and plans a backdoor listing to finance the deal, Shao said.
He estimated the project will bring in $800 million in revenue and $300 million in profit every year. Return on the investment could reach 20 percent, according to Shao.
The strip-mine's proven iron ore reserve comes to about 500 million tons, with prospective reserve reaching 1.39 million tons.
It puts out 3 million tons of iron concentrate annually, and Shao said the annual output capacity could reach 220 million tons after further investment.