--Ternium may get permission in September to build a steel mill at Acu, Brazil
--Mill is expected to have a capacity to produce up to 7.5 million metric tons a year of steel
(Updates with oil processing licence in sixth paragraph, negotiations with automaker in tenth paragraph, LLX 2Q loss in penultimate paragraph.)
RIO DE JANEIRO -(Dow Jones)- Latin American steelmaker Ternium SA (TX) may get the go-ahead in September to build a steel mill at Acu, the industrial port in Brazil's Rio de Janeiro state being developed by LLX Logistica SA (LLXL3.BR), LLX said Friday.
"A public hearing (on the project) early June went according to plan," LLX's chief financial officer Leonardo Gadelha told analysts on a conference call. "We expect Ternium will receive a preliminary licence by September."
The new steel mill, which will be 100% owned by Ternium, is expected to have a capacity to produce up to 7.5 million metric tons a year of steel slabs. According to Gadelha, it will take "several years to build the steel plant and a pellet plant."
Ternium officials in Brazil, Mexico and Venezuela weren't available to comment on the LLX director's statement.
LLX since 2007 has invested 1.8 billion Brazilian reais ($1.11 billion) in building the Acu port, which is due to start operations in late 2012, in total a BRL3.4 billion investment. Investments will accelerate to BRL450 million in the second half as contracts are expected to be signed with oil companies for oil processing at the site and as dredging work progresses, particularly at the inland canal that is being built to expand quay area, Gadelha said.
Brazil's oil industry regulator ANP in June approved LLX's application for installation of oil industry treatment facilities at Acu. The port will have the capacity to storage 14 million barrels of oil and process 1.2 million barrels per day, Gadelha said.
Recent investments at Acu have focused on the LLX Minas-Rio iron ore pier, where dredging has now been concluded, the LLX executive said. The iron ore pier has two berths and will have the capacity to export more than 50 million metric tons a year of iron ore, he said. The port is designed to export ore from Anglo American plc (AAL.LON)'s Minas Rio iron ore mines operations, which will have an initial capacity of 26.6 million tons a year of the steelmaking raw material.
Acu port will initially have a water depth of 21 meters, to be expanded later to 25 meters, and will be able to accommodate Capesize and Chinamax vessels, LLX said.
The Ternium steel mill plant is one of two integrated steel-mill projects slated for Acu port. The second, a five-million-tons a year slabs project by China's Wuhan Iron & Steel Co., or Wisco, is still in the study stage, LLX said.
LLX meanwhile also continues negotiations with an automaker for installation of a factory at Acu "in the medium term", Gadelha said.
LLX late Thursday reported a net loss of BRL15.2 million, on expenses of BRL35 million. This compares to a loss of BRL11.24 million in the same 2010 period, when expenses were BRL26.4 million.
LLX said it currently has BRL697.1 million in cash and its assets grew to BRL1 billion in the second quarter from BRL791.9 million a year earlier due to the development of Acu's port facilities.
Copyright © 2011 Dow Jones Newswires
