Reported by Luke 2020-3-9
Vale, the Brazilian miner, has decided to stop mining the Fazendao iron ore mine in the state of Minas Gerais after it ran out of licensed resources to continue mining at the site. The Fazendao mine is part of vale’s southeastern Mariana plant, which produced 11.296 million metric tons of iron ore in 2019, down 57.6 percent from 2018. Market participants speculate that the mine, part of Mariana’s plant, has an annual capacity of about 1 million to 2 million tons.
Vale said it would seek to expand new mines that have not yet been licensed and redistribute mine staff according to operating needs. But Vale’s application for permission to expand was rejected by local authorities in Catas Altas in late February, market participants said.
Vale said it would soon hold a public hearing to introduce the project to expand operations at other mines that have not yet been licensed.
One Chinese trader said weak sales at the Mariana plant had prompted vale to shift supply to other mines, so the shutdown was unlikely to have much impact.
The other Chinese trader said: “the mine area may have been shut down for some time and Malaysia’s reserves can act as a buffer until we see any disruption to BRBF shipments.”
From February 24 to March 1, the port of Tubarao in southern Brazil exported about 1.61 million tonnes of iron ore, the highest weekly export so far in 2020, due to better monsoon weather, according to export data seen by platts.