UPDATE 1-Brazilian miner Bahia Mineracao wins Fiol railway concession

(Adds details on Fiol railway)

SAO PAULO, April 8 (Reuters) - Brazilian miner Bahia Mineracao won a government auction on Thursday for a concession to operate a segment of the East-West Integration Railway (Fiol), which will allow the company to more easily ship iron ore from its mine to a coastal port.

Bahia Mineracao, a subsidiary of Kazakhstan’s Eurasian Resources Group, was the only participant in the auction and won with the minimum bid, paying 32.7 million reais ($5.89 million) to the government for the right to operate the railway.

The rail segment runs 537 kilometers from the town of Caetite in central Bahia state to the port city of Ilheus.

As part of the 35-year concession, Bahia Mineracao will be required to invest 3.3 billion reais ($594.18 million). That includes 1.6 billion to complete construction of the segment, with the government having completed 80%.

The railway will carry iron ore from Bahia Mineracao’s Pedra de Ferro mine, which plans to ramp up capacity to 18 million tonnes within five years, and allow for the transportation of grains once a connecting segment of the rail is complete. ($1 = 5.5539 reais) (Reporting by Aluisio Alves Writing by Jake Spring Editing by Leslie Adler Editing by Chris Reese)