The Rio de Janeiro State government has vetoed the installation of three iron ore export terminals worth BRL5 billion (US$2.19 billion) on the state's southern coast, State Secretary for Development Julio Bueno told Dow Jones Newswires Thursday.

The projects are: BHP Billiton's (BHP) terminal with 50 million metric ton annual capacity; Ferrous, owned by U.S., British and Australian investment funds, also with 50 million ton/year capacity; and Brazore, a joint-venture of ArcelorMittal (MT) and Canada's Adriana Resources (ADI.V), with 45 million tons/year capacity.

Bueno said the projects had been rejected for social, environmental and economic reasons.

"The projects won't give Rio a cent in state taxes," he said.

The projects affected are all in the Mangaratiba area near Itaguai, some 80 kilometers south of Rio de Janeiro City.

The same stretch of coastline contains a number of sailing resorts centered on Angra dos Reis, the historic town of Paraty, as well as a national park.

Bueno also said the region already contained too many projects of this type since Mangaratiba and Itaguai already have major iron ore export terminals.

"Our role is to defend society, and make sure there is compatibility between economic and social interests. We won't accept terminals at any price," he added.

"Iron ore exporters want to build terminals with capacity totaling 250 million tons, that more or less doubles Brazil's current exports," he said.

Bueno was referring to all seven iron ore terminal and steel mill complexes planned for the region.

The other four projects planned involve Gerdau SA (GGB), LLX Logistica (LLXL3.BR), Companhia Siderurgica Nacional (SID) and Usiminas Siderurgica de Minas Gerais (USNZY).

However, it isn't all bad news for the would-be iron ore terminal builders. Bueno said Rio de Janeiro State would guarantee access to other ports in the state for their iron ore.

Bueno also said the backers of the three vetoed terminals would be able to bid to use 50 million tons/year capacity to be built by the Rio state dock company, CDRJ.

A tender will be published for the concession by July, Bueno said.

-By John Kolodziejski, Dow Jones Newswires; 5521-2586-6086; john.kolodziejski@dowjones.com

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