UPDATE: Brazil's Batista, ICE Launch BRIX Electricity Exchange

Brazilian billionaire Eike Batista and other local investors said Tuesday that they will team with Intercontinental Exchange Inc. (ICE) to launch the BRIX electric energy trading exchange.

The energy trading platform aims to triple trading of contracts in Brazil's free energy market over the next three to five years to about 75 billion Brazilian reais ($47.5 billion), up from an estimated BRL25 billion in 2010, BRIX said in a press release to announce the deal.

"BRIX aims to serve more than 1,400 players on the Brazilian free energy market, which represents more than 25% of the country's energy consumption," the statement said.

Producers and consumers can currently negotiate electricity contracts via the country's electricity commercialization chamber, or CCEE. The CCEE publishes weekly data of prices negotiated for different regions and types of consumers.

The BRIX platform would provide up-to-the-minute pricing, according to the release. The contracts would still be registered with the CCEE.

BRIX plans to start operations in June, with the launch of a spot price index to measure behavior of electric energy prices in Brazil, Latin America's largest country. The platform may be extended to other markets in the region, BRIX Chief Executive Marcelo Mello said in Rio de Janeiro.

In addition to expanding the trading platform's geographic reach, BRIX may also expand beyond electricity contracts. The platform may be used to trade oil contracts, Batista told reporters.

The company may partner with BM&FBovespa (BVMF3.BR), Latin America's biggest exchange, or Brazil clearinghouse Cetip SA - Balcao Organizado de Ativos & Derivativos (CTIP3.BR) to provide clearinghouse services, or BRIX may set up its own clearinghouse, using ICE's experience in the area, said Roberto Teixeira da Costa, a BRIX partner and former president of Brazil securities regulator CVM.

BM&FBovespa has a partnership with the CME Group (CME), in which each holds a stake in the other company. The CME provides electricity futures contracts in the U.S. The agreement between the CME and BM&FBovespa didn't mention plans to bring electricity trading to Brazil, though it allows the Sao Paulo exchange to negotiate all CME contracts.

-By Diana Kinch and Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com

-Paulo Winterstein contributed to this report

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