World’s largest iron ore miner-Vale declared “Force Majeure” on some of its iron ore and pellet sales contracts on 5th Feb’19. This means company has suspended several iron ore and pellet contracts with buyers after the accident that has hit its production. This is an outcome to temporary suspension of iron ore production announced a day back at Brucutu mines having annual capacity of 30 MnT pa.
However, the miner is adopting appropriate legal measures to resume production at Brucutu mines at the soonest. The move of declaring “Force Majeure” is a step ahead towards safety after iron ore producer underwent collapse at its dam at Corrego do Feijao mine in Minas Gerais in Brumadinho, Brazil on 25th Jan’19 resulting in casualties.
The Vale dam tragedy has resulted in surge in iron ore prices. The spot iron ore prices have shot up sharply from USD 75/MT, CFR China assessed in end Jan’19 to USD 87/MT, CFR China towards early Feb. Reports suggest that the Force Majeure is expected to push prices further in near term.
Iron Ore Prices Surge 21% in a months time
The spot iron ore prices have witnessed significant rise on monthly basis from USD 72/MT, CFR China towards early Jan to around USD 87/MT, CFR China towards early Feb.
The Brucutu mine suspension is to bring about 30 MnT output curb in addition to 40 MnT operation hault previously imposed which includes pellets of 11 MnT pa. Company is looking to compensate this loss by increasing production from the other sites.
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.
Following the dam disaster in Brazil, Vale S.A on 29th Jan 2019 through its press release unveiled that, the company is planning to decommission its entire tailing dam built by the upstream method.
The miner reported iron ore production of 366.51 MnT in 2017, up by 5.1% against last year.
To know How Global iron ore and pellet supplies be in near term, book your place at 3rd Indian Iron Ore & Pellet Summit to be held on 18-19 Feb 2019 at the Leela Ambience, Delhi NCR, India.