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Brazil ministry notifies Vale to present iron ore dam safety plans within 10 days

Brazil’s Minas Gerais state public ministry notified Vale late Jan. 20 that it must present plans within days for measures to ensure the safety of 18 dams at its iron ore mines following recent intense rainfall in the state in southeast Brazil, the miner said.

The company will have 10 days from receipt of the formal notification to state what action it will take to prevent erosion of the dams, according to information released Jan. 19 by the ministry.

In an email to S&P Global Platts, Vale did not indicate whether any actions required would further impact iron ore production levels in its southeastern or southern systems. The company had already stated Jan. 17 it expected lost production and purchases of iron ore from third parties to total 1.5 million mt as a result of unusually heavy rainfall in early January.

“We have just been notified,” a press spokesperson said. “We are assessing the contents of the document and will carry out its requirements.”

“The technical teams are currently carrying out a thorough evaluation in order to [be able to] make the necessary improvements in the structures, especially in access, which has been affected by the intense rainfall in Minas Gerais in recent days,” the spokesperson said. “To guarantee the dams’ safety, the company monitors the 18 structures cited 24 hours a day, 7 days a week, in real time, via the CMG Geotechnical Monitoring Center.”

Vale noted, however, that those structures which have been set to emergency level 3 – B3/B4 (Nova Lima), Forquilha III (Ouro Preto) e Sul Superior (Barão de Cocais) – are accessed only by remote equipment and do not present any structural alterations. Containment operations at these three dams have already ceased and communities in these areas were evacuated in 2019, the spokesperson said.

Tighter dam regulations
Safety precautions over iron ore tailings dams in Brazil and elsewhere have been tightened following fatal dam failures at Samarco (a joint venture between Vale and BHP) in 2015 and Vale’s Brumadinho mine complex in 2019. Both are located in Minas Gerais and failed during Brazil’s rainy season.

The 18 dams for which plans for new preventive safety measures must be presented are located at the mines of Gongo Soco, Fabrica, Caue, Pico, Alegria, Aboboras, Capitao do Mato, Mar Azul and Fazendao, according to a statement from the public ministry.

Vale said Jan. 17 that it did not expect the impact of the rains to alter its previously-stated production guidance for this year of 320–335 million mt of iron ore, because the seasonal impact of rains is already taken into account in its production estimates.

Vale’s production last year recovered only in part after some curtailments imposed following the Brumadinho disaster were relaxed: however, the miner is still below its pre-Brumadinho production level of 384.6 million mt in 2018.

Seaborne iron ore prices extended gains Jan. 20 on continued strong buying interest.

S&P Global Platts assessed the 62% Fe Iron Ore Index at $133.65/ dry mt CFR North China Jan. 20, up $3.45/dmt from Jan. 19.
Source: Platts

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