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October 9, 2019

Rumo Confirms Expansion of Railroad in Mato Grosso, Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The director of the railroad company Rumo, Guilherme Penin, met with the Governor of Mato Grosso, Mauro Mendes, last week to confirm the company's plan to extend their Ferrronorte rail line further into the heart of grain production in Mato Grosso and to renovate and improve the section of the railroad in the state of Sao Paulo.

Rumo's Ferronorte railroad is currently the only railroad linking the state of Mato Grosso with Brazil's largest port of Santos. The railroad that passes through the state of Sao Paulo is quite old and Rumo is currently in the process of renovating and improving that section in anticipation of much higher traffic volume. Their concession to operate the rail line in the state of Sao Paulo expires in 2028 and Rumo is hoping to extend that for another 30 years.

Their plan is to invest R$ 15 billion over the next five years to not only improve their rail line in the state of Sao Paulo, but to also extend the railroad further into the state of Mato Grosso. Currently the railroad ends at the city of Rondonopolis in southeastern Mato Grosso and their plan is to extend it to the capital city of Cuiaba and then northward to the cities of Nova Mutum and Lucas do Rio Verde. Both Nova Mutum and Lucas do Rio Verde are centers of large soybean and corn production.

Once extended, the rail line would pass through much of the heart of grain production in the state as well as its main population centers. The plan also includes the construction of three more grain terminals along the new route. When completed, Rumo would have a total of seven grain terminals within the state of Mato Grosso. With the expansion of the railroad, not only would the railroad be able to transport more grain, it could also transport petroleum and other products from southern Brazil to Mato Grosso's largest city, Cuiaba.