Bahia Mineracao plans to double output at the Pedra de Ferro mine in Bahia state to two-million tonnes of iron-ore by next year, CEO Eduardo Ledsham said in an interview.

The mine shipped its first cargo of ore in January, with first-quarter sales only to the domestic market, Ledsham said. Foreign shipments are expected to begin in April, he said.

The company plans to invest four-billion reais ($746.41-million) to ramp up annual production capacity to 18-million tonnes within five years, he said.

"I see that we're headed into a new cycle of high iron-ore," Ledsham said of demand for the metal, mainly from China.

As part of that planned capacity expansion, the company will rely on the first segment of the East-West Integration Railway (Fiol), which has yet to enter operation. On April 8 the government plans to auction off a 35-year concession to operate the railway which connects to the coast.