Brazil : Vale's Decommissioning at Fabrica Mines to Impact 3 MnT Output

Vale- world's largest iron ore miner post the dam collapse of 25th Jan is proceeding with decommissioning of Forquilha I, Forquilha II, Forquilha III and Grupo dams which is expected to affect around 3 MnT production loss in 2019. Also, Vale announces decommissioning of the upstream Vargem Grande upstream dam, as per press release of Feb 4th. So it seems there will be an additional output loss of 3 MnT pa.

As per Brazilian National Mining Agency, the government is to ban new upstream tailing dam and orders decommissioning of all such dams by Aug 21. On similar ground, Vale is to decommission its 10 upstream dams in next three years.

Vale 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. The miner later declared force majeure, and cut down 40 MnT iron ore and pellet availability along with additional 30 MnT of raw material shortage due to operation hault at Brucutu mines. Later, on 15th Feb, Vale had temporarily suspended operation at its Malaysian Distribution Centre for about 10 to 15 days owing to fire broke out.

How have Chinese spot iron ore fines prices been so far this week ?

Fe 62% iron ore fines were recorded at USD 88.8/MT, CFR China towards the beginning of this week but later fell to USD 87.3/MT, CFR China yesterday. Chinese mills are seen preferring low grade ore over high grade amid shrinking steel margins.