Chinese firms step up role in Brazil after deals to boost role in transport system

President’s Michel Temer’s visit to Beijing used to announce contracts to build ports

PUBLISHED : Saturday, 02 September, 2017, 12:16pm
UPDATED : Saturday, 02 September, 2017, 10:47pm

Chinese companies have signed commitments to finance and build railways and ports that will help Brazil export iron ore and soybeans, the two main commodities it sells to China.

The deals coincided with a state visit to China by Brazilian President Michel Temer ahead of the BRICS summit in Xiamen.

China Communication Construction Co Ltd has agreed to finance the expansion of the Amazon basin port of Itaqui in the state of Maranhao, Brazilian Transport Minister Mauricio Quintella told reporters in Beijing. He gave no further details.

Separately, a consortium of five Chinese companies confirmed their intention to build a port in the city of Ilheus in Bahia state for the export of iron ore from a 20-million-tonne-per-year mine at Caetite, Quintella said in remarks broadcast on Brazilian government television.

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The companies plan to bid for a contract scheduled for auction next year to build and operate a railway line called FIOL to link Ilheus to the mine. It will also be used to transport soy for export.

The majority owner of the mine is Kazakhstan-based Eurasian Resources Group, with the state of Bahia holding the remaining interest.

Temer stopped in Kazakhstan on his way to Beijing and met ERG executives, who told him they planned to invest US$1 billion in the mine and contribute US$1.4 billion to build the railway, Brazilian newspaper O Globo reported.

Temer visited Beijing seeking increased investment by Brazil’s largest trading partner as his government pushed ahead with privatisation plans for airports, ports, roads and energy infrastructure, including Eletrobras, his country’s largest utility.

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According to Quintella, China’s HNA Group, which has bought 30 per cent of the concession to operate Rio de Janeiro’s Galeao international airport through its HNA Airport Holding Group Co Ltd subsidiary, will guarantee the opening of a flight route from that city to China, Chairman Chen Feng said in a meeting with Temer.