Lawsuit Claims Massive Improper Conversion and Sale of Iron Ore through Texas Port

Defendants among world’s largest producers of iron and steel

CORPUS CHRISTI, Texas – A Brazilian company known as Itabiriçu has filed litigation in a South Texas court against several iron and steel industry giants, including two Texas-based companies.

The lawsuit alleges that the defendants conspired to unlawfully convert, transport, and sell more than 100 million tons of low-grade iron ore rightfully belonging to Itabiriçu. According to the filing, Voestalpine Texas, LLC and Voestalpine US Holding LLC purchased the ore from Vale SA, a global mining company with operations in more than 30 countries for a sum estimated in the billions of dollars. The lawsuit describes that the iron ore was imported through the port of Corpus Christi, processed in Voestalpine’s plant in Corpus Christi, and then shipped worldwide through the port.

The lawsuit filed in Nueces County includes legal claims for conversion and tortious interference against the defendants, including ArcelorMittal Texas HBI LLC, and ArcelorMittal Texas HBI Holdings LLC, subsidiaries of ArcelorMittal S.A., a multinational steel manufacturing company and the second-largest steel producer in the world.

The dispute stems from longstanding, high-profile attempts by Itabiriçu to gain access over Vale’s objections to an area of the Itabira Mining Complex known as the Research Permit Polygonal, located in southeastern Brazil. The Polygonal largely consists of a massive, water-filled area that stores tailings, which are mineral waste products produced by mining operations. Itabiriçu is an early adopter of reprocessing technology that allows for the extraction of high-grade iron from what had historically been considered toxic and unusable materials.

Following nearly a decade of successful legal actions brought by Itabiriçu, in September 2023 a Brazilian federal court upheld the company’s ownership of the tailings and its right to access the Polygonal and begin reprocessing efforts. These efforts would greatly reduce the environmental and societal risks to the region associated with the storage of the tailings. Vale’s mining operations have been linked to at least two catastrophic tailings dam failures, one in January 2019 that killed at least 270 people and the other in December 2015 that killed at least 19 people.

However, according to the lawsuit, prior to that September ruling Vale extracted iron tailings belonging to Itabiriçu, sold them to the buyers in Texas, and shipped the raw materials for reprocessing by the Texas entities. Vale admitted in Brazilian court documents that the sale occurred, and shipping manifests confirm the delivery to Nueces County.

“This is perhaps one of the most brazen and deliberate conversions ever to occur in the mining industry,” says Michael K. Hurst of Dallas-based Lynn Pinker Hurst & Schwegmann, attorneys for Itabiriçu. “Vale and its co-conspirators have conceivably made billions of dollars through the sale of raw materials that rightfully belong to our client, and the evidence fully supports these claims.”

The case is Itabiriçu Nacional de Pesquisa Mineral Ltda v. Vale SA, et al, Case No. 2023CCV-61340-2 in County Court at Law No.2 in Nueces County. Itabiriçu is represented by Michael P. Lynn, Michael K. Hurst, Greg A. Brassfield, Chloe M. Teeter, and Kyle A. Gardner of Lynn, Pinker, Hurst & Schwegmann LLP, Raymond L. Thomas of Ray Thomas PC, and John Flood of John T. Flood LLP.

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