Environmental agency cancels Vale’s operating license for dam in 30mln-tpy mine

The environmental secretariat of Brazil’s southeastern Minas Gerais state, Semad, has suspended a license granted in 2015 for Vale to operate the Laranjeiras tailings dam, connected to the Brucutu iron ore mine.

The decision follows a court ruling that ordered the suspension of the Brucutu mine, according to Vale, and it makes any restart of the mine's operations more difficult.
"The resumption of the Brucutu operation is conditioned to the reversal of the preliminary [court] ruling [that suspended the mine] and the granting of the operational license to the Laranjeiras dam," Vale said on Wednesday February 6.
Brucutu is the largest mine in the company's southeastern system, with capacity to produce around 30 million tonnes per year of iron ore.
The court ruling has led Vale to declare force majeure on a number of iron ore and pellet contracts.
The Laranjeiras tailings dam had been operating under a provisional environmental authorization since 2016, and a full operating license was being evaluated, according to Vale.
"Vale reinforces its understanding that there is no technical and/or legal basis, nor risk assessment, to justify the canceling of the provisional operational authorization," the company said.
The miner "will adopt the appropriate administrative and legal measures in relation to this decision."
The environmental agency also called for the suspension of the Jangada mine, which has been halted since the stoppage of the Córrego do Feijão mine.
Dam I of the Córrego do Feijão mine ruptured on January 25 and flooded Vale’s facilities, part of the local community and the Paraopeba river. Authorities have confirmed that 150 people were known to have died because of the accident, while 182 more are currently missing.
Fastmarkets’ 62% Fe iron ore index was at $85.53 per tonne cfr on February 4, before the Lunar New Year celebrations started in China.

Felipe Peroni

felipe.peroni@fastmarkets.com

Published

Felipe Peroni

February 06, 2019

23:20 GMT

São Paulo