Brazil's state development bank, BNDES, will lend 3.9 billion reais ($1.93 billion) to iron ore miner Vale SA to boost logistics capacity by 30 percent in the north of the country where its biggest mine is situated, the bank said on Thursday.

BNDES will provide about half of the planned 8 billion-reais investment to double-track on 115 km (72 miles) of the rail link that carries ore from Vale's huge Carajas mine in Para state and to purchase rolling stock. More works will be carried out to expand capacity at Vale's Ponto da Madeira seaport.

Vale said in a communique released shortly after the BNDES statement that construction is expected to begin in the first half of 2014.

The investments aim to raise Vale's logistics capacity in the northern region to around 150 million tonnes of iron ore per year.

"Brazil is the second biggest producer of iron ore in the world, and rail links and ports are an important differential in cutting the cost of ore since Carajas mines are geographically far from Asian consumers," BNDES said in a statement.

China is Brazil's biggest trading partner and top buyer of its iron ore supplies.

Brazil's government last week announced billions of dollars in public-private investments in infrastructure for the coming years, aiming to shift more freight to rail transport which is underused in Brazil despite its vast territory.

Vale is interested in bidding in auctions for these projects wherever it could affect the transport of its products, CEO Murilo Ferreira said last week.