Brazil: Vale to Cut Iron Ore Production after Dam Disaster

Vale- world's largest iron ore producer underwent collapse at its dam at Corrego do Feijao mine in Minas Gerais in Brumadinho, Brazil on 25th Jan'19. At Feijao mine dam 1 collapsed, which used to dispose tailings from ore production and was inactive. The disaster unleashed mining debris into the region resulting in huge loss of life and property especially in the town of Brumadinho.

Following the dam disaster in Brazil, Vale S.A on 29th Jan 2019 through its press release unveiled that, the company is planning to decommission its entire tailing dam built by the upstream method.

They have already presented their course of action before the concerned Brazilian authorities. Company is planning to restructure its tailing upstream dams to reintegrate as per the environment demand. Vale currently has total 10 dams built by the upstream method; all of them are currently inactive.

Vale to spend R$ 5 billion to decommission its upstream dams - Vale estimates that investments of around R$ 5 billion will be necessary to decommission its upstream dams and estimates that the decommissioning process will occur over the next 3 years. Meanwhile, Vale will temporarily halt the production from the units where the structures are located. Once the decommissioning works get completed, an operation of the halted units resumes.

Estimated impact of production around 40 MnT - To accelerate the process of dam decommissioning, the company will have to stop production of iron ore in nearby areas. The estimated impact of the production halted is around 40 MnT of iron ore per year, including the pellet feed needed for the production of 11 MnT of pellets per year. The 40 MnT of iron ore represents 10% of the forecast of production of Vale. Company is looking to compensate this loss by increasing production from the other sites.

Vale achieves highest ever iron ore & pellet production in Q3 CY18-:

Vale witnessed sharp increase in Q3 CY'18 iron ore production. The production recorded at 104.95 MnT, up 8% Q-o-Q as against Q2 CY'18 at 96.8 MnT. On yearly basis, the production recorded 10% increase as compared to 95.1 MnT in Q3 Y17.

The ramp-up of Tubarao I and II pellet plant, along with restart at Tubarao IV post maintenance shut resulted in increased Q3 pellet production. The production reached 13.9 MnT, up 8% as against 12.84 MnT in last quarter. On yearly basis too, the production increased 9% as against 12.77 MnT in Q3 CY17.