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Montevideo, April 21st 2019 - 06:38 UTC


Brazil's Vale iron ore miner ordered to suspend operations in two more dams

Tuesday, March 19th 2019 - 08:17 UTC
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Vale has faced growing pressure to prove that its remaining dams are safe. The fatal disaster in the town of Brumadinho was the second of its kind in four years Vale has faced growing pressure to prove that its remaining dams are safe. The fatal disaster in the town of Brumadinho was the second of its kind in four years
The company's iron ore production is expected to be 82.8 million tons, or 21% lower than was planned for the year due to the restrictions on its Brazil operations The company's iron ore production is expected to be 82.8 million tons, or 21% lower than was planned for the year due to the restrictions on its Brazil operations

Brazilian court has ordered Vale SA, the world's largest iron ore miner, to suspend operations at two more dams, demanding that it prove the structures are stable. The court decision dated Friday is the latest in a series of orders forcing Vale to halt operations at various dams that contain the muddy detritus of mining operations after one such barrier collapsed in January, killing some 300 people.

Vale has faced growing pressure to prove that its remaining dams are safe. The fatal disaster in the town of Brumadinho was the second of its kind in four years.

The company's iron ore production is expected to be 82.8 million tons, or 21% lower than was planned for the year due to the restrictions on its Brazil operations, including the planned decommissioning of all its upstream dams.

Karel Luketic, analyst for steel, iron ore and pulp at XP Investimentos, said on Monday he does not expect the impact on Vale's earnings to be as large because iron ore prices are rising, which could compensate for lower volumes.

The miner said in a statement that the latest suspension, impacting its Minervino and Cordao Nova Vista dams, will not have a significant impact on its operations. It said that mining waste was already being shipped to “other structures,” which it did not identify.

Vale said on Friday it had received a court order to suspend activities at Ouro Preto dam. Vale shares closed slightly lower in Sao Paulo, in contrast to a rally in rival miners Rio Tinto and BHP.

The company's shares fell on the same day the Sao Paulo exchange's main index reached 100,000 for the first time.

The restrictions to Vale operations in Brazil seem to have impacted shipments, something that was not clear in the first weeks after the disaster in Brumadinho.

According to trade ministry data released on Monday, Brazil's iron ore shipments for the first two weeks of March were 1.29 million tons per day on average. Shipments in February averaged 1.44 million tons per day while in March 2018 they averaged 1.42 million tons.

In related news Vale SA said it was granted a court injunction allowing it to resume iron ore shipping operations at the Ilha Guaíba port terminal in Mangaratiba, Rio de Janeiro state.

In a securities filing, Vale said local authorities at Ilha Guaíba terminal were already notified of the injunction and authorized the resumption of operations at the site, from where the company ships around 40 million tons of iron ore per year, or around 10% of its expected production in 2019 prior the Brumadinho disaster.

Categories: Energy & Oil, Politics, Brazil.

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