MercoPress. South Atlantic News Agency

Uruguay’s project for a deepwater port on the Atlantic takes off

The sketch of the deepwater port to be built in La Angostura

Uruguay’s government is going forward with plans to build its first deepwater port along the Atlantic coastline in a place called “La Angostura”, an investment estimated in over 700 million dollars and which it wants to use as a platform to begin exporting iron-ore to China.

Construction of the port on the country’s most eastern province, next to Brazil is schedule to begin in 2014, according to a decree signed by President Jose Mujica and published on the Executive website expropriating 458 plots of land where the ocean terminal is planned to be built.

China has expressed interest in investing in the port, Vice President Danilo Astori said over the weekend following a meeting in Montevideo with Chinese Premier Wen Jiabao.

Minera Aratiri since 2007 has been developing a project to export an estimated 18 million metric tons a year of iron-ore that the Jersey Island based company says would convert Uruguay into the world’s eighth largest producer of the mineral.

Aratiri says it would create 1.500 permanent jobs and contribute 1.4 billion dollars to Uruguay’s 39 billion dollars economy over the life of the 20-30 year project.

However the project has not been without controversy: to start with Aratiri contemplates open mining in an area considered of prime agriculture value; the ore is to be transported to the coast, in a mineral-pipeline much questioned by environmentalists because of its impact and the water needed to impulse the ore; precisely because of these and insufficient data the environment impact assessment studies from the Aratiri project have been thrown out at least twice.

Furthermore given the reiterated obstacle of the Environment Office, President Mujica threatened to transfer the office which has ministerial status directly to the Executive as a simple advisory office.

Independent reports indicate that the ferrous content of the ore to be extracted is not as high as in neighbouring Brazil and iron rich Bolivia which makes it vulnerable to international price fluctuations.

However this can be overcome by shipping the iron ore without processing through the pipeline since the Aratiri ore allegedly contains other rich valuable minerals and properties given the geological profile of the area.

The future terminal which lies on a strip of land between the Atlantic Ocean and an inland lagoon (Laugna Negra) in an area six kilometres long (from kilometre 236 to 242 of national highway 10 connecting with Brazil) parallel to the coast, is also considered a prime tourist area because of its sand dunes and open sea.

Aratiri is controlled by Zamin Ferrous, a closely held miner which also is developing iron-ore projects in Brazil.

There has been information in the Sao Paulo press that the whole Aratiri project has been transferred to Zamin Ferrous interests in Brazil and that the company is seeking additional funding and has requested the Uruguayan government to join the project.

The information has not been confirmed in Montevideo but members of the ruling coalition close to President Mujica have said that if necessary to take the project forward, it should not come as a surprise that the Uruguayan state becomes a partner in the undertaking.