CMOC makes iron ore push with Brazil mine financing deal

The trading arm of Chinese copper giant CMOC Group Ltd. is making a push into iron ore with a deal to finance a mining company in Brazil.

CMOC’s IXM SA has agreed to a prepayment facility with Brazil’s Itaminas Comercio de Minerios SA in return for iron ore supply, a person familiar with the matter said, asking not to be named describing a deal that hasn’t been publicly announced. Reuters reported the agreement earlier on Wednesday.

The deal is IXM’s first in iron ore and comes as other trading houses like Vitol Group and Trafigura Group are growing portfolios in the steel raw material through prepayment deals — where firms pay in advance for long-term supply and interest. 

Iron ore miners are increasingly looking for money from private investors like trading houses as prices for the commodity have slumped below $100 a ton.

Geneva-headquartered IXM, Itaminas and CMOC all declined to comment. 

With a history as the metals trading unit of agricultural giant Louis Dreyfus Co., IXM was bought and brought into CMOC in 2019. 

The firm has in recent years scaled back its third-party trading in metals like lead and zinc to focus on those produced by its parent, such as copper and cobalt. CMOC is the owner of Tenke Fungurume, the world’s second biggest copper mine, in the Democratic Republic of Congo.

IXM is now being led by former Mitsubishi and Trafigura trader Branko Buhavac, who succeeded Kenny Ives as its CEO and as the commercial director of CMOC.

Last year, CMOC agreed to buy gold assets in Brazil for $1 billion, extending a push into precious metals. It already mines niobium and phosphates in the country.

(By Archie Hunter, Mariana Durao, Annie Lee and Katharine Gemmell)