* MMX has "take-or-pay" iron ore contract with MRS railway
* Vale is main shareholder in MRS Logística railway
* Vale may soon break into U.S. iron ore pellet market
BELO HORIZONTE, BRAZIL, Sept 24 MMX, a mining
company controlled by Brazilian tycoon Eike Batista, should
honor a contract to pay Brazil's MRS railway for iron ore
shipments even if its mines are not ready to produce, Vale SA
Chief Executive Murilo Ferreira said on Tuesday.
MMX Mineração e Metálicos SA has a take-or-pay
contract with the MRS Logística SA railway to ship
36 million tonnes of iron ore a year through 2026 at 26.46 reais
($12.03) a tonne. The iron ore was to be shipped from MMX mines
in Minas Gerais state to MMX's Sudeste Port near Rio de Janeiro.
The contract states MMX must pay for at least 80 percent of
the total contracted volume starting in 2017 whether it actually
ships the iron ore or not, according to MMX's website.
Vale owns 38 percent of MRS's voting stock and 42 percent of
its total capital, making the Rio de Janeiro-based miner the
railway's largest shareholder.
MMX has slowed development of the Minas Gerais iron ore
projects in the wake of Batista's financial problems and the
resulting difficulties at MMX and other companies in his EBX
mining, energy, shipbuilding and port-operations group.
As a result of its difficulties, MMX has sought to
renegotiate the MRS contract and other accords with suppliers.
Most EBX companies have lost 90 percent or more of their
value in the past year as Batista has found it hard to raise new
capital to keep his largely revenue-less start-ups going without
giving up control to new investors.
MMX rose 0.6 percent to 1.69 reais in early afternoon
trading in São Paulo on Tuesday. Vale preferred shares, the
company's most-traded class of stock, fell 1.25 percent to 35.56
OPENING U.S. MARKET
Ferreira also said on Tuesday that Vale is in talks to sell
iron ore pellets to a customer in the United States, the only
major market where the world's largest ore producer has no
Vale has no pellet sales in the United States, the world's
largest economy, Ferreira said during a speech at a mining
conference in Belo Horizonte, Brazil.
Even though Brazilian iron ore has a higher iron content
than U.S. ores, most U.S. steelmakers get their ore from mines
in and around the Great Lakes, which provide cheap water
transportation for the heavy raw material.