better link SAO PAULO, June 26 (Reuters) - Brazilian mining start-up Ferrous Resources do Brasil SA plans to raise iron-ore output tenfold to 17 million tonnes by 2016 as it races to fill rising demand for the main steel ingredient being driven by Chinese expansion, the company said on Tuesday.
Ferrous expects to boost output 76 percent to 3 million tonnes from 1.7 million tonnes in 2011. Half of 2012 output will come from its Viga mine and half from its Esperanca mine, the company said in an e-mailed statement.
Ferrous estimates its iron ore reserves at 5 billion tonnes, Chief Executive Jayme Nicolato said in the statement.
Ferrous, MMX Mineracao e Metalicos, Bahia Mineracao SA, and Anglo American Plc's Minas-Rio project are among the Brazilian mining startups that have sprung up to challenge the dominance of the iron-ore market's "Big Three": Brazil's Vale and Australia's Rio Tinto and BHP Billiton.
The Big Three control about 70 percent of the world's sea-borne, iron ore exports of about 1 billion tonnes a year. China is the biggest customer of iron ore and largest producer of steel.
Ferrous's projects have already allowed it to reach positive earnings before interest, taxes, depreciation and amortization, an indication a company's cash flow closely watched by analysts, Nicolato said.
Since its creation in 2007, the company has started operations in the towns of Congonhas, Brumadinho and Itatiaiuçu in the southeastern state of Minas Gerais, Brazil's main iron-ore mining region
Ferrous do Brasil expects to finish its feasibility study on a 400 km (250 mile) iron ore slurry pipeline. The pipeline will link its Viga mine in Congonhas to the port terminal in the town of Presidente Kennedy on the coast of Espirito Santo state, boosting its export capacity.
Iron ore with 62 percent iron-content .IO62-CNI=SI fell 1.24 percent to $135.40 a tonne in the Chinese spot market Tuesday. Iron ore prices have fallen by nearly a third from 2011 highs, but are still twice what they were in early 2009. (Reporting by Gustavo Bonato; Writing by Reese Ewing; Editing by Jeb Blount and M.D. Golan)