As the global steel industry accelerates its shift toward decarbonisation, the demand for high-grade iron ore has surged. With steel producers, responsible for 8% of global carbon emissions, set to transition from traditional blast furnaces to cleaner technologies such as electric arc furnaces, premium iron ore with low silica and phosphorus content, which reduces emissions during processing, will be increasingly in demand. Currently, only 8% of global iron ore producers supply this premium-grade material. Itaminas, situated in Brazil’s Iron Quadrangle, is set to grasp the emerging opportunities as the iron ore from Brazil’s south-eastern state of Minas Gerais meets these stringent quality standards.
“Given the expected growth of the market for high-grade iron ore, we plan to invest $300 million over the next ten years, to grow the business,” says Thiago Toscano, president of Itaminas.
New era for Itaminas
He explains that as the 10th largest producer in the region, Itaminas is prepared to scale up its operations significantly. With an existing annual output of 6.5 million tonnes and environmental permits to expand to 15.5 million tonnes, the company is poised to bridge the supply-demand gap. “No other company in the region has such potential for growth within the same infrastructure,” he says.
The company, established in 1958 and operating in the Sarzedo, Belo Horizonte Metropolitan Region, is now entering a new era of development under new owners – in July 2024 the business was acquired by a group of Minas Gerais investors who defined a new vision in line with the increased focus on sustainability. That was also the time when Thiago Toscano assumed his role to lead the business transformation, together with two of his colleagues, the newly appointed VP for Finance, Rodrigo Géo and VP for Operations, Argeu Filho.
“Although Itaminas is the tenth largest mining company in Brazil, we are the first one committed to helping decarbonise the steel industry,” says Toscano. “That is a significant differentiating factor.”
Central to Itaminas’ growth strategy is a robust investment plan defined following the change in ownership. Over the next two to three years, the company plans to invest $150 million in technology and infrastructure, the so-called process route. This includes improving iron ore quality and enhancing production efficiency. Itaminas is already making some of its own investments, and is fundraising for more, says Toscano.
He explains that the key investments focus on mill balls, spirals and flotation technology, which separate iron from silica more effectively. These advancements will enable Itaminas to increase the proportion of high-grade iron ore in its output from 30% to 70% by 2026 and its quality from 62,5% Fe to 67% Fe.
Additionally, the construction of a new rail terminal will double its logistics capacity from 10 million to 20 million tonnes annually, facilitating not only its own exports but also partnerships with other mining companies in the region.
“This logistical expansion has broader implications. By creating a regional logistics hub, Itaminas aims to establish itself as a central trading partner, enhancing its market presence and strengthening the economic ecosystem in Minas Gerais,” says Toscano.
Environmental and Social Stewardship
The company operates from a single site currently employing some direct 700 employees with an additional 1800 people on site working for a range of suppliers to whom Itaminas outsources services such as machinery operations and logistics.
For the company, sustainability is a business imperative. The company’s environmental strategy includes initiatives to rehabilitate mining areas and preserve natural habitats. Collaborations with environmental experts aim to restore ecosystems and explore opportunities in the carbon credit market. This dual approach enables Itaminas to offer high-grade iron ore alongside carbon credits, further supporting its clients’ decarbonisation goals.
“Our commitment to sustainability expands to the adjacent environment. For example, we have established an outstanding urban park in the city of Sarzedo. While we are not legally obligated to fund the park’s expansion and maintenance, we have taken on this responsibility for the next five years.”
Itaminas’ is also deeply invested in the welfare of local communities. Two neighbourhoods near the company’s operations, historically among the needy in Sarzedo, are at the centre of its social initiatives. “By partnering with public schools, health centres, and community organisations, we seek to enhance the quality of life for residents and create a sense of pride in their neighbourhoods,” affirms Toscano.
“Our social initiative includes, for example, martial arts and gymnastics classes for over 200 children. Infrastructure investments and support for the population in these neighbourhoods aim to make them desirable places to live. We believe that we can really change the reality of life for these people, reverse out-migration trends and create new pathways to enable local people to improve their livelihood and personal income.”
Itaminas’ commitment to local development extends to its suppliers. Unlike many mining companies, Itaminas actively supports its local partners. For instance, all transport services from its crushing facility to the rail terminal are provided by neighbourhood-based trucking companies. Itaminas assists these businesses in acquiring vehicles and developing sustainable operations, creating a mutually beneficial relationship that benefits the local economy.
Vision for the future
The long-term transition towards ‘green steel’ suggests suppliers of high-grade low-impurity ores are relatively well positioned. As such, the future of Itaminas is as ambitious as it is promising. Within five years, the company aims to complete its new rail terminal and transition a significant portion of its production to high-quality iron ore. An initial public offering (IPO) is also on the horizon, providing the financial resources to acquire or partner in new mineral reserves and expand its footprint in Brazil’s mining sector.
“Beyond business growth, we aspire to set a benchmark for social and environmental responsibility in the mining industry. Unlike traditional corporate social responsibility programmes, Itaminas integrates community development and environmental sustainability into its core operations,” says Toscano.
By aligning its operations with global decarbonisation efforts and prioritizing community well-being, Itaminas demonstrates that profitability and sustainability can go hand in hand. As it scales its operations and strengthens its market position, the company is poised to become a leader in both the mining sector and the broader movement toward a more sustainable world.
