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July 24, 2021

Extension of Ferronorte Railroad in Mato Grosso Gains Momentum

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The planned extension of the Ferronorte Railroad in southern Mato Grosso is gaining momentum after the Brazilian Minister of Infrastructure met with the governor of Mato Grosso and other local officials. The Minister applauded the Governor when he called for bids to build and operate the Ferronorte Railroad extension to be submitted as soon as possible.

The extension will go from the city of Rondonopolis in southeastern Mato Grosso to the state capital of Cuiaba and then to the cities of Nova Mutum and Lucas do Rio Verde which are in the heart of the state's grain production. The total investment is estimated at R$ 12 billion for over 600 kilometers of track including 4 terminals and 60 bridges and viaducts.

The first phase of the project is 200 kilometers of track to be laid from Rondonopolis to the state capital of Cuiaba where a terminal is expected to be completed by the second semester of 2025. The second phase is to continue the railroad north to the city of Nova Mutum and then Lucas do Rio Verde where the terminal is expected to be completed by the end of 2028.

Interested companies now have 45 days to present proposals, but the company Rumo Logistica is expected to have an inside track in winning the concession to build and operate the railroad for 45 years. They currently operate the railroad from Rondonopolis to the Port of Santos in southeastern Brazil.

Environmental studies are underway, and construction could start within six months after the environmental license is approved.

In addition to the current terminal in Rondonopolis, additional terminals will be built in the cities of Primavera do Leste, Cuiaba, Nova Mutum, and Lucas do Rio Verde. Once completed, the grain production of south-central Mato Grosso will be connected by a continuous rail line to the Port of Santos, which is Brazil's largest. It is expected to reduce the cost of moving grain to market and the back hauling of inputs such as imported fertilizers.