OREANDA-NEWS. September 16, 2011. MPX and MMX have concluded negotiations for the supply of electric power amounting to 200 average MW.  Additionally, the parties have signed a Letter of Agreement regarding the implementation of an own-production structure, pending the requisite authorizations from The National Electric Energy Agency (ANEEL). The agreement guarantees the supply of power for a period of 15 years, beginning in May, 2014, at a base-price of RUSD  125/MWh (as of May, 2011) and thus the total value of the agreement amounts to approximately RUSD  3.3 billion. The power will be supplied from MPX Parnaiba Thermoelectric Complex located in the state of Maranhao, and will go to MMX’s Serra Azul Unit in Minas Gerais.

In addition to MMX, MPX concluded negotiations with other parties for the supply of 30 average MW, on a long term basis, beginning in January, 2013, also with a view to using the own-production structure. The total value of these sales amounts to approximately RUSD  158 million. With the recent conclusion of negotiations to supply a total of 230 average MW, MPX Parnaiba’s total contracted power reaches 1,130 average MW with a total installed capacity of approximately 1,500 MW. With the adoption of the own-production system, MMX will be able to achieve a reduction of approximately 35% in terms of energy costs in relation to the average value per MWh currently paid.

Roger Downey, CEO of MMX said, "Energy will be an important component of MMX’s cost of production in the new beneficiation plant at the Serra Azul Unit. The contract with MPX ensures a stable supply of energy at very competitive prices for our operations.  With an uncertain future for the global supply of energy, we have achieved a significant competitive advantage brought about through the synergies of the EBX Group.  Energy supplied by the own-production system, reducing overall costs, is the new trend in the mining market and MMX is at the forefront of that process.”

“MPX has once again shown its ability to create competitive differentiators and thus grow with attractive returns. The development of a shared own-production structure results in even more competitive energy prices, allows us to maximize the use of the natural gas produced in our blocks and brings direct benefits for us as well as those who purchase power from us”, stated Eduardo Karrer, MPX’s CEO.