Mubadala and Trafigura shelve USD 5 bn Brazil port sale as iron ore market weakens

Mubadala and Trafigura have shelved the sale of Porto Sudeste after bids came in about 30% below what they wanted. Abu Dhabi’s Mubadala Capital and Trafigura Group, which own the Brazilian iron ore terminal, plan to keep it until they get a better price, Bloomberg reports, citing people familiar with the matter. Weaker iron ore prices pulled the offers down, one of the people said, and the owners are in no rush to sell, another said. Trafigura declined to comment, and Mubadala didn’t immediately respond to a request for comment.

The price gap

The owners valued the port at around USD 5 bn, and the offers were roughly USD 3 bn and USD 3.5 bn. Mubadala and Trafigura appointed Goldman Sachs and UBS BB to advise on a potential sale in 2024, and by August 2026, offers had emerged from infrastructure investors including BlackRock’s Global Infrastructure Partners, I Squared Capital, and Stonepeak. Gerdau has since withdrawn from a consortium that was considering a bid alongside GIP and miner Vale. The owners acquired a combined 65% stake in the port in 2014, according to a statement.

Contracted cargo gives bidders more revenue visibility: Porto Sudeste extended its agreements with Itaminas and AVG last year, raising their potential annual handling volumes to 8 mn and 4 mn tons and extending both contracts to around 20 years. The agreements also raised minimum-volume commitments, though the operator didn’t disclose the minimum tonnages. Vale was separately considering a long-term take-or-pay agreement to support the GIP-led bid, which would have given investors more revenue visibility without Vale taking an equity stake.

The risk doesn’t end with a signed contract: The valuation gap suggests investors are unwilling to pay for growth until the additional volumes translate into actual earnings, Wolfgang Lehmacher, former head of supply chain and transport industries at the World Economic Forum, tells EnterpriseAM. Long-term cargo commitments provide some protection but their value ultimately depends on the financial strength of the miners behind them, Lehmacher argues. When multiple customers face the same downturn, even take-or-pay contracts offer limited protection. “Long-term commitments protect only as far as customers can keep paying,” he adds.

And what about Mudadala’s plans for Brazil? The sovereign investor was reportedly considering using the proceeds to expand investments in Bahia, where its subsidiary Acelen Renováveis secured USD 1.5 bn in financing for a biofuels refinery in May. The broader development is expected to require more than USD 3 bn in investment, with operations scheduled for 2029. Trafigura also signed an agreement in June to supply feedstocks and market some of the refinery’s future production.

Mine to ship

One of the port’s own customers is cutting production due to higher freight costs. Itaminas, which holds a long-term handling agreement with Porto Sudeste, announced in September that it would temporarily halt one of its four processing plants in October and place around 300 workers on collective leave. CEO Thiago Toscano said freight had risen to around USD 42 a ton from USD 19 a year earlier. Elsewhere, in Minas Gerais, CSN Mineração lowered its 2026 production and third-party ore purchasing guidance to 39-41 mn tons from 45-47 mn tons in September, citing freight-related margin pressure, according to a filing with the US Securities and Exchange Commission, according to US Securities and Exchange Commission.

Ore reaches the port by truck and rail from Minas Gerais: At the jointly owned Morro do Ipê mining operations, ore travels roughly 30 km by truck along Brazil’s BR-381 federal highway to rail terminals in Sarzedo and Brumadinho, then around 515 km by rail to Porto Sudeste, according to Morro do Ipê’s 2024 sustainability report (pdf). The port unloads, stores, and blends the ore and moves it through a 1.8-km conveyor tunnel to the shiploaders, according to Trafigura’s 2024 annual report (pdf).

Beyond the iron ore

Volumes have held up, at about half the port’s capacity. The terminal shipped a record 27.8 mn tons of iron ore in 2025, up from 21.9 mn tons in 2024, and 13.6 mn tons in 1H 2026, according to its earnings (pdf). Its existing capacity is 50 mn tons a year, with an expansion license covering up to 100 mn tons.

And record volumes don’t necessarily mean a resilient network: “Record tonnage shows last year’s demand, not resilience. I would test whether committed volumes come from customers who can honor them in a downturn, and examine customer concentration, overdue receivables, debt-service headroom, ship waiting times, and who controls access to the railway, on what terms. Then I would ask which link limits the chain: berth, railway, or mine. Resilience is capacity customers can still afford to use,” Lehmacher tells us.

Oil is the port’s next cargo, though its revenue is unproven: Porto Sudeste is spending BRL 177 mn on dedicated mooring and berthing structures for oil and petroleum products, separating liquid-bulk transfers from the shared pier. The operator expects the facilities to be completed in 1H 2027 and to support up to 144 liquid-bulk operations a year, against 19 in 2025. The expansion adds 50 mn tons of annual liquid-bulk transfer capacity to the terminal’s existing 50 mn tons, bringing it toward the licensed 100 mn tons.

Oil could make Porto Sudeste less dependent on iron ore, but only with contracted revenue from producers outside the ore cycle, Lehmacher says. The investment needs to attract creditworthy producers whose business doesn’t move with iron ore demand, he argues. Dedicated oil facilities could also ease pressure on ore-handling schedules and potentially provide overflow capacity for the nearby port of Açu, provided operations can be safely separated.

Shuttle tankers and anchor contracts could limit what the new oil berths earn, Lehmacher says. If shuttle tankers are scarce, they could be another bottleneck. However, with many new moorings the terminal builds and without firm commitments from oil customers, the planned rise in liquid-bulk operations carries no assured revenue. “Without anchor contracts, up to 144 operations a year is an option, not a hedge,” he adds.