Brazil-based iron ore producer MMX Mineracao & Metalicos' subsidiary, MMX Sudeste Mineracao, has filed for bankruptcy protection from creditors in a Belo Horizonte court.
MMX Sudeste controls the Serra Azul and Bom Sucesso ventures, and generates the majority of revenue for MMX Mineracao, which is owned by Brazilian tycoon Eike Batista, reported Bloomberg.
MMX Sudeste Mineracao is the third business of Eike Batista to file for bankruptcy after oil and shipbuilding units.
MMX is currently facing rise in debt and a slump in revenue due to delays in iron ore mines in Minas Gerais and an iron ore terminal in Rio de Janeiro, according to Reuters.
In addition, the fall in the price of iron ore and low demand for the mineral from China has hit MMX's revenues.
MMX said in the statement: "Despite the management's efforts to negotiate with creditors and seek potential investors, the bankruptcy protection request appeared as the most adequate alternative given the company's economic and financial situation."
In 2013, MMX reported huge losses after halting the expansion of its flagship Serra Azul project.
In February this year, the company sold a controlling stake in its iron ore project in Rio de Janeiro to Trafigura Beheer and the Mubadala development for $400m. It then agreed to lease its Corumba mine to Vetria Mineracao in July.