This is what Jim Chanos would call “signs of a top”…

According to a recent Bloomberg article, Rio de Janeiro-based Manabi filed on May 16 to sell shares in Sao Paulo and Toronto to help finance $4.12 billion of iron ore projects in Brazil’s Minas Gerais state. Apparently, Ontario Teachers’ Pension Plan, Canada’s third- biggest pension fund sank in a few hundred million to own a 21 percent stake.

Full me once …

The Canadian pension fund is seeking to replicate its gains from a $450 million investment in Eike’s OGX which swelled in value to $2.5 billion when the oil producer went public in 2008. Manabi’s plans include building two projects with capacity to produce 31 million metric tons of iron ore per year and a port terminal in neighboring Espirito Santo state.

Companies from Vale to Anglo American Plc (AAL) are experiencing delays in new iron ore projects in Brazil because of permit delays, cost increases and logistics bottlenecks (and, in the near future, excessive supply). Ferrous Resources Ltd., another latecomer iron-ore venture backed by Phil Falcone (the larger-than-life investor who put US$7billion into wireless company Lightsquared just to see it go all the way down to bankruptcy), has been looking for a strategic partner to help finance its iron-ore projects since at least 2009. In fact, Carl Icahn bought a stake in the company recently.

“I don’t think this is a great time to bring yet another iron-ore play to the marketplace,” Arthur Byrnes, chairman of Deltec Asset Management LLC, told Bloomberg “I don’t see why anybody would be rushing.”

“It’s very tough in this market environment because you are not going to have quarterly catalysts that are going to be drivers for the stock,” said Blackrock’s Will Landers. “Vale is so cheap now that why would you get involved with a smaller company?”

Ruchir Sharma, Morgan Stanley’s head of Emerging Markets likes to call this new commodities super-cycle illusion “” for it is strikingly similar in some ways to the mania for technology stocks that gripped the world in the late 1990s.

“When the rapture is over, the nations and companies that have been living high off commodities will also share the sinking feeling that followed the dotcom boom,” he said in his latest book Breakout Nations.

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