Iron ore prices expected to see short-term gains after Vale flags 40m-ton-per-year production impact

Iron ore prices are set for short-term gains following Brazilian miner Vale SA’s announcement early on Wednesday January 30 to decommission all of its upstream dams over the next three years, a move that will have a production impact of 40 million tons per year or around 10% of the miner’s projected output for 2019.

“Vale estimates that investments of around R$ 5 billion ($1.3 billion) will be necessary to decommission its upstream dams and estimates that the decommissioning process will occur over the next 3 years,” the company said on Wednesday. To carry out the decommissioning of the upstream dams safely and quickly, Vale will temporarily halt the production of units where the structures are located, namely the Abóboras, Vargem Grande, Capitão do Mato and Tamanduá operations, in the Vargem Grande complex; and the Jangada, Fábrica, Segredo, João Pereira and Alto Bandeira operations, in the Paraopebas complex, also including the stoppage of the Fábrica and Vargem Grande pelletizing plants, it added. “The estimated impact of the production stoppage is about 40 million tons of iron ore per year, including in this figure...

Published

Alex Theo

January 30, 2019

09:00 GMT

Singapore