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China firm to buy Brazil iron mine for $1.2 bln:rpt

* State-backed Chinese miner continues acquisitions

* New investments could boost Itaminas capacity

RIO DE JANEIRO, March 24 (Reuters) - A Chinese mining company has agreed to buy the Itaminas iron ore mine from a Brazilian business magnate for $1.2 billion, local media reported on Wednesday.

Valor Economico said mine owner Bernardo de Mello sold the 3 million tonne per annum facility to the Chinese state-backed East China Mineral Exploration and Development Bureau (ECE), without saying where it got the information.

A representative of Itaminas contacted by Reuters could not comment on the issue.

The mine has debts of $400 million and an estimated 1.3 billion tonnes of iron ore reserves. It could produce 25 million tonnes per annum with additional investment, Valor said.

ECE, which according to Valor has assets in Indonesia, Australia and Mexico, last September took a controlling stake in London-listed African copper miner Weatherly International Plc WETI.L which has four copper mines in Namibia.

Soaring iron ore prices that are flirting with the $150 per tonne level have sparked growing interest in iron assets, with two Brazilian steelmakers considering spinning off their mining assets as separate companies to take advantage of the boom.

Reporting by Cesar Bianconi, Writing by Brian Ellsworth; Editing by Lisa Shumaker