In 2023, Vale's net profit amounted to US$ 39.94 billion, which represents 0.6% of what the Brazilian mining company paid the Federal Government for renewing the concessions of its two main railroads: the Carajás Railroad (also known as EFC) and the Vitória-Minas Railroad (also known as EFVM). The Jair Bolsonaro administration renewed concessions for 30 years.
According to the current federal administration, the mining company paid a derisory amount for the right to use the railroads. To renew the concession, Vale discounted investments made and not amortized, paying only BRL641 million (about US$123,7 million) to the federal government. The grant was priced at BRL15.9 billion (over US$3,07 billion).
Claiming to be following a recommendation made by Brazil’s equivalent to the General Accounting Office to the Ministry of Transport, the Ministry of Transport is asking Vale for BRL25.7 billion in unpaid grants for the renewal of the concession: BRL21.1 billion (over US$4,07 billion) for the Carajás Railroad and BRL4.6 billion (about US$888 million) for the Vitória Minas Railroad.
In a notice sent to Vale on January 26, Transport Minister Renan Filho pointed out that the Carajás Railroad is highly profitable, as it is responsible for almost all the transportation of the company's largest iron ore deposit. Currently, the expansion of the Carajás operation, particularly the Carajás S11D Iron Project (formerly the Serra Sul Project), guarantees Vale's position among the five largest mining companies in the world.
In previous years, the mining company's profit was even higher: BRL95.9 billion (US$18,5 billion) in 2022 and BRL121 billion (over US$23,3 billion) in 2021.
The Bolsonaro government renewed earlier than expected the railroad concession contracts that were to run until 2027. The decision was made under the responsibility of Tarcísio de Freitas, then Minister of Infrastructure and now governor of São Paulo.
What Vale says
Asked by Brasil de Fato whether it will comply with the federal government's request and make the payment of BRL25.7 billion (about US$5 billion) to the Federal Government, Vale said it “is in advanced discussions with the Ministry of Transport on the general conditions for the optimization of the investment plans of the Carajás Railroad and the Vitória to Minas Railroad Concession Contracts, which are currently being regularly executed by Vale under the terms established and disclosed to the market on December 16, 2020.”
The mining company also said it “will inform the market if any material commitment is established within the scope of the negotiations, in line with current legislation."
