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March 18, 2021

More Hurdles for Brazil's Ferrograo Railroad (Grain Railroad)

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

A Supreme Court Judge in Brazil suspended preliminary work on the much anticipated Ferrograo Railroad (Grain Railroad) linking the state of Mato Grosso, which is Brazil's largest producer of soybeans, corn, cotton, and cattle) with the Port of Miritituba on a tributary of the Amazon River. The 933 kilometer railroad was scheduled for bidding in 2021.

The Supreme Court Judge, Alexandre do Moraes, determined that the Provisional Approval which changed the boundaries of the Jamanxim National Part allowing the railroad to use 862 hectares of previous park land (2,130 acres) was unconstitutional. Preliminary work on the railroad being done by the National Land Transportation Agency (ANTT) and the Minister of Infrastructure is essentially suspended while this issue is litigated.

Last October, Brazil's Federal Public Prosecutor's Office (MPF) joined with Brazil's Federal Accountability Office (TCU) and numerous other organizations to oppose the construction of the railroad. Additionally, numerous organizations representing indigenous people in the area expressed their opposition to the railroad in fear of potential adverse impacts on 48 indigenous areas in the states of Mato Grosso and Para. The MPF office indicated that the Brazilian government must consult with the indigenous groups before the railroad can be approved.

The Ferrograo Railroad would link the state of Mato Grosso with Brazil's "Northern Arc" of ports along the Amazon River. The proposed railroad would cost approximately R$ 21.5 billion (approximately $4 billion) and lower the cost of transporting grain out of Brazil. The railroad would also lower carbon emissions by relieving truck traffic on Highway BR-163, which is currently the only land connection between Mato Grosso and the central Amazon region.