(Recasts with background)
By Alonso Soto and Jeb Blount
BRASILIA/RIO DE JANEIRO, Oct 16 (Reuters) - An iron-ore mining company controlled by Brazilian tycoon Eike Batista filed for bankruptcy on Wednesday, the third time in a year that a unit of the former billionaire’s EBX industrial group has sought protection from creditors.
MMX Sudeste Mineracao SA, the company that made the petition, holds nearly all the significant assets of Batista’s MMX Mineracao e Metalicos SA, part of an EBX mining, oil, energy, shipbuilding and port group that suffered one of the most spectacular collapses in emerging-market history in 2013.
The move comes as a decade-long commodities boom ends. The price of iron ore .IO62-CNI=SI, the main ingredient in steel, has fallen to around its lowest level in five years.
As China’s economy weakens, demand for iron ore and other minerals has dropped. Lower prices have made many new mining projects uneconomic.
The MMX Sudeste petition will probably determine whether parent MMX can continue as a viable company. Delays in developing MMX iron ore mines in Minas Gerais and an iron ore terminal near Rio de Janeiro have crimped MMX revenue while increasing debt.
Expectations that Brazil and its vast commodity resources would prosper as China grew allowed Batista to build an industrial empire worth more than $50 billion and a personal fortune of about $30 billion. It made him Brazil’s richest man and the world’s seventh-richest as recently as 2012, according to Forbes Magazine.
Failure to meet production promises at his OGX Petroleo e Gas SA oil company in 2012 started a decline in EBX group shares.
Batista, who used his stock to borrow money and finance EBX projects in the face of multi-year delays, ran out of credit and his fortune evaporated.
OGX and shipbuilder OSX Brasil SA sought bankruptcy protection in October and November of 2013.
In September, Brazilian prosecutors filed criminal charges against Batista, accusing him of market manipulation. Courts also froze 1.5 billion reais ($611 million) of his and his family’s assets.
Before that, Batista sold most of his holdings to pay debt, including most of MMX’s share of an iron ore port near Rio de Janeiro.
MMX, though, remained his principal asset. MMX was the company that sold its Minas-Rio iron ore project to London-based global mining giant Anglo American Plc in 2008 for $5.5 billion.
Batista used that cash to launch OGX, OSX and the rest of the EBX Group that crash-landed last year.
After the sale to Anglo American, MMX moved to develop another iron ore project in the highlands of Minas Gerais.
MMX also has an agreement to operate the Pao de Vinho iron-ore prospect. Pao de Vinho is owned by Usinas Siderurgicas de Minas Gerais SA, a Brazilian steelmaker controlled by a group led by Japan’s Nippon Steel and Sumitomo Metal Corp. ($1 = 2.4547 Brazilian real) (Reporting by Bruno Marfinati; Writing by Alonso Soto; Editing by Ken Wills, Peter Cooney and Alan Raybould)