September 27, 2011

Another Section of the North Railroad Authorized in Mato Grosso

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

The Brazilian equivalent of the EPA (Ibama) has given authorization for the third leg of the North Railroad to be built in Mato Grosso. This 75.6 kilometer section will link the towns of Itiquira and Rondonopolis in southeastern Mato Grosso. When construction is finished, it will extend the rail line 250 kilometers into the largest soybean producing state in Brazil linking soybean producers with the Port of Santos in southeastern Brazil. The long-range plan is to extend the line another 200 kilometers past Rondonopolis to the state capital of Cuiaba and then eventually another 1500 kilometers to the Amazon port city of Santarem.

The rail line between Alto Araguaia and Rondonopolis is being built and operated by America Latina Logistica Malha Norte, but it has not yet been determined who will be given authorization to build and operate the section between Rondonopolis and Cuiaba. In fact, a delegation of Chinese private and public officials has recently been in the state to assess the possibility of constructing the railroad between Cuiaba and the Amazon River.

The third grain terminal on the railroad is scheduled to be operational in Itiquira by the end of the year and the tracks are scheduled to arrive in Rondonopolis by the end of 2012. Plans are already underway in Rondonopolis to construct one of the largest grain terminals in Brazil. After Rondonopolis, the rail line is scheduled to proceed to the state capital of Cuiaba where it is scheduled to arrive by late 2015, but many view this as optimistic given the fact that it has taken about a decade and a half to get the first half of the railroad built.

The railroad consists of a single track with a pull-over ever 30 kilometers to allow trains to pass each other. America Latina Logistica was asked to build two tracks or at least put in the infrastructure needed to add a second track at a later date, but financial problems at the company allowed for only a single track to be built with no additional infrastructure.