(c) Financial Times, London – Zamin, a Brazilian iron ore company, is considering a London flotation.

The company’s decision to look at a London listing comes just weeks after Ferrous Resources, another developer of Brazilian iron ore mines, cancelled its planned London offering, citing volatile markets and a mixed outlook for the raw material that makes steel.

A banker familiar with the company said Zamin’s value would likely range at $2bn-$2.5bn, below the $3.5bn (£2.3bn) value that Ferrous was expected to command.

Zamin is further ahead than Ferrous in completing feasibility studies and receiving permits necessary to build its flagship project, according to company and independent analysts.

Zamin expects its principal mine in Bahia state – called Bahia Mineracao, or Bamin – to cost $1.8bn to build. The project is half-owned by Eurasian Natural Resources Corp, the London-listed Kazakh miner.

Mine construction at Bamin could start as soon as Zamin secures project financing.

Pramod Agarwal, the founding owner of Zamin, is a successful independent metals trader and former chairman of Gerald Metals, the private trading house.

“There is not much convincing that is required,” Mr Agarwal said, describing his relative ease in selling Zamin’s merits to potential investors.

“The creditors are lining up to help this project.”

Bankers close to Ferrous, however, said last month that there was a disconnect between high iron ore prices on the spot market and investor appetite for funding iron ore projects. Such mining projects take years to begin production, making investment a long-term bet on steel demand and sustained manufacturing growth. Recently, iron ore prices have been falling.

Martin Kannengieser, a Zamin director, said the company’s key advantage is its mine’s proximity to Brazil’s “east-west railway”. Transport infrastructure is often at the heart of iron ore projects’ viability and mining companies sometimes have to build expensive slurry pipelines or railways hundreds of kilometres to the coast.

Brazil’s federal government, however, has authorised construction of a major railway artery through Bahia state, in an attempt to foster growth in a relatively undeveloped region. The Bamin site is 9km from the planned railway, Zamin said, noting that the transport infrastructure costs associated with the project are small relative to peer projects.

Both Zamin and Ferrous have been successful in carving independent niches in the iron ore industry in Brazil. The country’s vast iron ore reserves are highly concentrated in the hands of Vale and a few other miners. Bamin’s project chief is a former head of iron ore at Vale.

“There are advantages to going public,” Mr Kannengieser said. “You have more alternatives, and it is easier to develop a credit profile. But it’s not something we’re desperate to do. When it makes sense, when the market is appropriate, we will look at it seriously.”