Vale has signed an agreement with the municipal government of Vitória, capital of Brazil’s south-eastern state of Espírito Santo, to resume operations of pellet plants and port logistics at Tubarão, the miner said on Wednesday February 13.
The municipality previously ordered the company to stop water treatment processes at the site on February 8, which prompted the halt of pellet plants 1 through 4 and restricted the operations of the supply stocking area and some coal port logistic services.
The Tubarão system, which comprises eight different pellet plants, has a production capacity of 36.7 million tonnes per year, according to documents filed with the Securities and Exchange Commission (SEC).
The city environmental secretariat and the state environment institute have since conducted inspections, Vale said on February 13.
“It was verified that there are no irregularities in the system, which operates in line with its operational permit,” the company added.
As per the agreement, Vale will need to invest in improvements to water treatment and air quality control at Tubarão, the statement showed.
The city government of Vitória’s restriction was another regulative move, although not directly related, on Vale after one of its tailings dams in the state of Minas Gerais ruptured and flooded the vicinity on January 25 near the city of Brumadinho.
Authorities have confirmed 165 people have died following the failure of the dam in the city of Brumadinho and 155 more are missing.
Since the disaster Vale has decided to decommission all of its tailings dams that operate through the upstream method, which is considered riskier. The move has potential to cut up to 40 million tpy of the company’s output over three years.
Vale’s production could also be trimmed further after the state environmental agency of Minas Gerais, SEMAD, cancelled a preliminary license for the use of a dam at the Brucutu mine. Although Vale is taking legal measures to revert this decision, 30 million tpy could be affected.
The supply disruption from Brazilian mines has provided a boost to iron ore prices. Fastmarkets’ 62% Fe iron ore price index delivered to Qingdao, China, hit a recent peak of $90.58 per tonne cfr on February 11, up from $74.69 per tonne on January 25.
The index has since fallen and was last at $87.22 per tonne on February 13, still 16.8% higher than before the accident happened.
Source from Fastmarkets MB |
