Trafigura Group, together with Mubadala Capital—the investment arm of Abu Dhabi’s sovereign wealth fund—is considering the sale of their Brazilian iron ore port terminal operator. This asset was originally acquired from Eike Batista, a once-prominent billionaire, roughly ten years ago. This strategic decision marks a pivotal point for both entities as they look to divest their stake in the Porto Sudeste facility, situated in Rio de Janeiro.
The decision to sell stems from discussions with various banking institutions as Trafigura and Mubadala Capital seek potential buyers for up to the entirety of their holdings. This process, which involves a controlling stake acquired from Batista’s MMX Mineracao & Metalicos in 2014, also includes debt securities linked to terminal royalties—a financial arrangement where about 85% is held by the two companies.
Trafigura and Mubadala’s involvement in Porto Sudeste has been a key component of their asset portfolios, but the port’s performance has shown variability in its operational capacity. Despite a significant increase in activity, shipping 26.1 million tons of iron ore last year—a jump from 17.4 million tons the previous year—the terminal is still operating below its optimal capacity of 50 million tons per annum.
The sale is seen as a recalibration of investment focus, particularly for Mubadala, which plans to redirect the proceeds into sustainable energy projects. Specifically, the proceeds are intended to enhance investments in a Bahia state venture, where a planned refinery will produce green diesel and sustainable aviation kerosene. This shift underscores a broader strategic pivot towards more environmentally friendly and sustainable energy sources, aligning with global trends towards green energy.
Porto Sudeste, while substantial in its throughput capabilities, has faced challenges in attracting consistent users. Brazil’s largest iron ore producer, Vale SA, operates its own export facilities, which has intensified competition for Porto Sudeste, impacting its ability to maximize operational throughput.
The potential sale of Porto Sudeste represents a significant shift in the strategy of both Trafigura and Mubadala, as they reevaluate their asset management approaches and investment priorities. The outcome of this sale could influence market dynamics, particularly in the iron ore export sector, which is pivotal to Brazil’s economy. As negotiations and discussions continue, the exact details and potential buyers remain under wraps, with Trafigura, Mubadala, and Porto Sudeste maintaining a no-comment stance on the matter.
