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WHEN BRAZILIAN MINING and energy group EBX was seeking a strategic partner for one of its subsidiaries in late 2008 the company knew exactly where to turn. With the Lehman Brothers’ bankruptcy bringing chaos to the west’s financial markets and economies, the company controlled by billionaire Eike Batista reached out to the part of the world that was least adversely affected: Asia. Batista’s group needed investment for its mining subsidiary, MMX, to develop its Sudeste operations based in the Brazilian state of Minas Gerais. With the mining capacity of the two units at Sudeste expected to reach 33.7 million tonnes by 2014, EBX sought an investor that made most sense from a capital, growth and business point of view. All of the companies on EBX’s radar were Asian.
"It was absolutely a conscious decision to look for an Asian partner," says Paulo Gouvea, head of corporate finance at EBX. "The marginal buyers of natural resources come from Asia, so it was an obvious decision."
The company that MMX eventually decided on was China’s Wuhan Iron & Steel Group, the country’s third-biggest steelmaker.