Companhia do Vale do Araguaia

completed

CVA was established in 2005 and owns and manages approximately 9,700 hectares of land in Mato Grosso state. Of total land holdings, roughly 6,500 ha are planted with teak (Tectona grandis). A project was proposed earlier that was to include expansion of the land base of the project to roughly 30,000 ha, of which about 18,000 ha would have been planted in teak and the balance managed for conservation or infrastructure purpose. However, the Company decided in 2013 not to expand its operations and will plant no additional forests prior to harvest of existing teak stands. IFC is considering a debt investment in the Company which will be spending about US$ 40 million on managing its plantations through maturity, equipment purchases, installation of a primary saw mill, and working capital. The Company’s operations are centered in Mato Grosso state with a small, limited trial at the western edge of Goias state. The regions where the existing farms are located in that part of the Amazônia Legal originally covered by cerrado or savannah habitat. All areas which have been planted with teak by CVA were converted from the cerrado vegetation to agricultural use (cattle, soy, corn, etc.) during the 1970s and 1980s prior to acquisition by the Company starting in 2005.