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

Mubadala and Trafigura are holding onto their Brazilian iron ore port for now, after bids came in c. 30% below what they wanted. Mubadala Capital and the commodities trader have shelved the sale of Porto Sudeste and plan to keep the terminal until they can get a better price, Bloomberg reports, citing people familiar with the matter.

Why it matters: Mubadala had been weighing using the proceeds to expand investments in Bahia, where its subsidiary Acelen Renováveis is building a biofuels refinery. Acelen secured USD 1.5 bn in financing for the refinery in May, less than half the USD 3 bn-plus the broader development is expected to need before it starts operating in 2029. Trafigura has a stake in that project’s success too. In June, it signed on to supply feedstock and market some of the refinery’s output.

The owners wanted c. USD 5 bn, and buyers offered USD 3-3.5 bn. Mubadala and Trafigura appointed Goldman Sachs and UBS BB to advise on a potential sale in 2024, valuing the port at around USD 5 bn, but weaker iron ore prices dragged offers down. By August, bids of roughly USD 3 bn and USD 3.5 bn had emerged from infrastructure investors including BlackRock’s Global Infrastructure Partners (GIP), I Squared Capital, and Stonepeak. Brazilian steelmaker Gerdau has since pulled out of a consortium that was weighing a bid alongside GIP and miner Vale. Mubadala and Trafigura bought a combined 65% of the port in 2014.

Bidders would have been buying locked-in cargo: Porto Sudeste extended its contracts last year with miners Itaminas for 8 mn tons and AVG for 4 mn tons in potential annual volume, running both agreements for roughly 20 years. The new contracts also raised minimum-volume commitments, though the operator didn’t disclose the tonnages. Vale was separately weighing a long-term take-or-pay transaction to back the GIP-led bid, which would have given investors more revenue visibility without Vale taking equity.

The port sits at the end of a c. 545 km chain from mine to ship. Ore from Morro do Ipê, the Minas Gerais mine Mubadala and Trafigura own together, travels c. 30 km by truck along the BR-381 federal highway to rail terminals in Sarzedo and Brumadinho, then c. 515 km by rail to the coast, according to the Morro do Ipê 2024 sustainability report (pdf). At the port, the ore is stored, blended, and carried through a 1.8 km conveyor tunnel to the shiploaders, according to the Trafigura 2024 annual report (pdf).

Rising freight costs are already hitting the port’s customers: Itaminas said in September it would halt one of its four processing plants this month and put c. 300 workers on collective leave, citing higher maritime freight costs. It is also using the stoppage for maintenance and upgrades. Freight has climbed to around USD 42 a ton from USD 19 a year earlier, Itaminas CEO Thiago Toscano said. Elsewhere in Minas Gerais, CSN Mineração cut its 2026 production and third-party purchasing guidance to 39-41 mn tons from 45-47 mn tons in September, citing pressure on margins from freight, it said in a filing with the US Securities and Exchange Commission.

Volumes are growing, but the terminal is still running at just over half its capacity. Porto Sudeste shipped a record 27.8 mn tons of iron ore last year, up 27% from 21.9 mn tons in 2024, and 13.6 mn tons in 1H 2026, roughly last year’s pace, according to its earnings release (pdf). Last year’s throughput used c. 56% of the terminal’s 50 mn-ton annual capacity. Its licence allows it to expand to 100 mn tons.

Oil could give the next owner a second line of business: Porto Sudeste is investing BRL 177 mn in dedicated mooring and berthing for oil and petroleum products, which will move liquid-bulk transfers off the pier it currently shares with iron ore. The facilities are due in 1H 2027. They will let the terminal handle up to 144 liquid-bulk operations a year, up from 19 in 2025, and add 50 mn tons of annual transfer capacity, taking the total to its 100 mn-ton licensed limit. That would make the port less dependent on iron ore, though how much oil will add to revenue is still untested.

MEANWHILE- Mubadala is still deepening its Brazil biofuels play, this time through distressed debt. Mubadala and Brazilian corn-ethanol producer FS are looking at buying debt held by creditors of Raizen, the troubled sugar, ethanol, and fuel distribution company jointly owned by Shell and Cosan, Bloomberg reports, citing people it says are in the know. Talks are preliminary, and FS has hired Morgan Stanley to advise.

Buying the paper now is a route to a Raizen stake at distressed prices: Raizen agreed with creditors in March to restructure about BRL 65 bn (USD 12.2 bn) out of court, and those creditors will swap the debt for more than 80% of its capital. Mubadala and FS are not the only suitors: alternative asset manager IG4 Capital Group signaled interest in June in buying enough debt to take control of Raizen but is now seeking only credit tied to the company’s sugar and ethanol division, according to the business news service.