You are here
Brazil court suspends operations at two more Vale dams
[RIO DE JANEIRO] A Brazilian court has ordered Vale SA, the world's largest iron ore miner, to suspend operations at two more dams, demanding that it prove the structures are stable.
The court decision dated Friday is the latest in a series of orders forcing Vale to halt operations at various dams that contain the muddy detritus of mining operations after one such barrier collapsed in January, killing some 300 people.
Vale has faced growing pressure to prove that its remaining dams are safe. The fatal disaster in the town of Brumadinho was the second of its kind in four years.
The company's iron ore production is expected to be 82.8 million tonnes, or 21 per cent, lower than was planned for the year due to the restrictions on its Brazil operations, including the planned decommissioning of all its upstream dams, according to data compiled by Reuters.
Karel Luketic, analyst for steel, iron ore and pulp at XP Investimentos, said on Monday he does not expect the impact on Vale's earnings to be as large because iron ore prices are rising, which could compensate for lower volumes.
The miner said in a statement that the latest suspension, impacting its Minervino and Cordao Nova Vista dams, will not have a significant impact on its operations. It said that mining waste was already being shipped to "other structures," which it did not identify.
Vale said on Friday it had received a court order to suspend activities at Ouro Preto dam.
Vale shares closed slightly lower in Sao Paulo, losing 0.18 per cent to 50.46 reais, in contrast to a rally in rival miners Rio Tinto and BHP.
The company's shares fell on the same day the Sao Paulo exchange's main index reached 100,000 for the first time.
The restrictions to Vale operations in Brazil seem to have impacted shipments, something that was not clear in the first weeks after the disaster in Brumadinho.
According to trade ministry data released on Monday, Brazil's iron ore shipments for the first two weeks of March were 1.29 million tonnes per day on average.
Shipments in February averaged 1.44 million tonnes per day while in March 2018 they averaged 1.42 million tonnes.