Caemi

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CAEMI Mineração e Metalurgia S.A.
Type	Public (Bovespa:)
Founded	Iron Quadrangle,Minas Gerais 1942[1]
Headquarters	Nova Lima, Brazil
Key people	Augusto Antunes (founder)
Industry	Mining, Logistics
Products	raw materials, logistics and railway transport
Revenue	▲$2.3 billion USD (2005)
Net income	▲$824 million (2005)[2]
Subsidiaries	CADAM, MBR

Caemi Mineração e Metalurgia S.A. was a major Brazilian mining holding company that ceased to exist in December 2006 after it was merged into Vale. Caemi means Companhia Auxiliar de Empresas de Mineração.

Contents 1 Operations 2 MBR - Minerações Brasileiras Reunidas 2.1 Vale acquires MBR 3 Vale acquires Caemi 4 References

[edit] Operations

The company owned iron ore mines in the so-called Iron Quadrangle region of the state of Minas Gerais, and kaolin mines in the northern states of Amapá and Pará. The company also owned a stake in MRS Logística, which owns a railway network in southeastern Brazil. Caemi's stock was traded on Bovespa.

[edit] MBR - Minerações Brasileiras Reunidas

Caemi started MBR in a partnership with M. A. Hanna Company in 1965.^[3] MBR since 1971 had been the second biggest iron ore producer in Brazil^[4], mining in 2005 over 50 million tonnes of iron ore^[5] or around 25% of Brazilian production.^[6]

MBR until Vale acquired 100% of Caemi's capital in 2006 was owned by two companies: Caemi and EBM (Empreendimentos Brasileiros de Mineração S.A.). Caemi had a 49% stake at MBR while EBM owned the other 51% of the company. The problem is that Caemi also owned 70.1% of EBM, this fact brings Caemi's total stake at MBR to 84.75%. Caemi's 84.75% participation at MBR is recognized at the company's 2005 Annual Report, which was Caemi's last.^[7]

EBM, besides Caemi had two other investors:

• Vale owned 9.9% of EBM since 2001, participation which was purchased from Bethlehem Steel^[8]
• Japanese investors owned the remaining 20% of EBM^[9] and in this group were included the following companies: Mitsui^[10], Nisshin Steel, Nippon Steel, Mitsubishi Corporation, JFE Steel, Itochu, Sumitomo Group, Marubeni and Kobe Steel.^[11][12]

[edit] Vale acquires MBR

After Vale bought 100% of Caemi, Vale's stake at MBR reached 89.8%, that's because Vale became the owner of Caemi's 84.75% stake at MBR and Vale already indirectly owned 5.05% of MBR through its 9.9% stake at EBM.^[13]

This meant that Vale had only to acquire the remaining 20% of EBM at the hands of the japanese investors in order to become owner of 100% of MBR. This objective was achieved on May 2007 when Vale bought for $231 million 6.25% of EBM from the japanese investors and simultaneously leased the 13.75% left from the japanese group in exhange for a down payment of $60.5 million and annual fee of $48.1 million for the next 30 years.^[14][15] Vale now owns 100% of MBR.

[edit] Vale acquires Caemi

The mining company Vale bought between 2001 and 2006 100% of Caemi's capital for a total cost of $3.2 billion.

Back in 2001 Vale bought for $278.7 million 16.82% of Caemi's capital^[16] then in 2003 Vale purchased Mitsui's partipation on Caemi for $426.4 million^[17], raising Vale's partipation to 60.2% of Caemi's total capital.

Finally on March 31, 2006 Vale purchased the remaining 39.8% of Caemi's capital in a stock swap deal worth $2.5 billion.^[18] In May the company's shares stopped being negotiated at Bovespa^[19] and then in December Caemi was merged into Vale and ceased to exist.^[20]

[edit] References