September 1, 2017 / 6:12 PM / a year ago

China ramps up role in Brazilian transport infrastructure

BRASILIA (Reuters) - Chinese companies signed commitments on Friday to finance and build railways and ports that will help Brazil export iron ore and soybeans, the two main commodities it sells to China, during a state visit by Brazilian President Michel Temer.

Chinese President Xi Jinping shakes hands with Brazilian President Michel Temer during a signing ceremony at the Great Hall of the People in Beijing, China September 1, 2017. REUTERS/Lintao Zhang/Pool *** Local Caption *** Xi Jinping;Michel Temer

China Communication Construction Co Ltd (601800.SS) agreed to finance the expansion of the Amazon basin port of Itaqui in the state of Maranhão, Brazilian Transport Minister Maurício Quintella told reporters in Beijing. He gave no further details.

Brazilian President Michel Temer attends a meeting with Chinese President Xi Jinping (not pictured) at the Great Hall of the People in Beijing, China September 1, 2017. REUTERS/Lintao Zhang/Pool *** Local Caption *** Xi Jinping;Michel Temer

Separately, a consortium of five Chinese companies confirmed their intention to build a port in the city of Ilheus in Bahia state for the export of iron ore from a 20-million-tonne-per-year mine at Caetité, Quintella said in remarks broadcast on Brazilian government television.

The companies plan to bid for a contract scheduled for auction next year to build and operate a railway line called FIOL to link Ilheus to the mine. It will also be used to transport soy for export.

The majority owner of the mine is Kazakhstan-based Eurasian Resources Group, with the state of Bahia holding the remaining interest. Temer stopped in Kazakhstan on his way to Beijing and met with ERG executives, who told him they planned to invest $1 billion in the mine and contribute $1.4 billion to build the railway, Brazil media O Globo reported.

Temer visited Beijing seeking increased investment by Brazil’s largest trading partner as his government pushed ahead with privatization plans for airports, ports, roads and energy infrastructure, including Eletrobras (ELET6.SA), his country’s largest utility.

According to Quintella, China’s HNA Group, which has bought 30 percent of the concession to operate Rio de Janeiro’s Galeao international airport through its HNA Airport Holding Group Co Ltd [HNAIDD.UL] subsidiary, will guarantee the opening of a flight route from that city to China, Chairman Chen Feng said in a meeting with Temer.

Reporting by Anthony Boadle; Editing by Lisa Von Ahn

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