Ferrexpo PLC said on Wednesday it had purchased stake in a Brazilian miner. The transaction was valued USD80 million. The acquisition of the stake was Ferrexpo's move to expand beyond its operations in Eastern Europe, according to a Reuters report.
The Ukraine-based iron pellet producer said in a statement that it had taken 14.4% stake in Ferrous Resources. The latter is a privately owned Brazilian miner that had planned expansion in the mineral rich state of Minas Gerais.
Majority of Ferrexpo is owned by Kostyantin Zhevago, a parliamentarian and Ukranian billionaire. The company had faced a long legal battle over the ownership of its Poltava mine. Analysts identified political risk issues to be a key challenge for the Ukraine based iron pellet producer.
The acquisition of the stake by Ferrexpo also gave the company a foothold in the country against its main pellet manufacturing rival, mining major Vale.
Ferrous Resources currently produces approximately 5 million tonnes of iron ore per year. The Brazilian miner had been granted to expand its production to 15 million tonnes, said a Reuters report.
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