Brumadinho dam disaster keeps hurting Vale: iron ore output falls 34%

Brazil’s Vale (NYSE:VALE), the world’s No.1 iron ore miner, saw output of the steelmaking commodity collapse by almost 34% in the second quarter of the year, compared to the same period in 2018.

The drop to 64.057 million tonnes came as several of its major operations, including Brucutu, which is the Rio de Janeiro-based firms’ biggest mine in the southeastern state of Minas Gerais, remained fully or partially shut down following a deadly dam burst at the company’s Corrego do Feijão mine.

A major drop in second-quarter iron ore output was due to Vale’s key operations remaining fully or partially shut down following a deadly dam burst in January

Vale also said that iron ore sales from March to June had dropped by 15.5% to 61.945 million tonnes.

Since January’s dam collapse, which left at least 300 people dead, both authorities and companies have stepped up scrutiny of so-called upstream dams, the cheapest but generally regarded as the riskiest method to store mine waste.

In March, Vale was forced to shut its Timbopeba mine, which produced 12.8 million tonnes of iron ore per year, due to safety concerns. It also suspended operations at its Mariana complex, where a similar accident occurred in 2015, killing 19 people and flooding the local area.

The company later received an order to halt another two dams — Minervino and Cordao Nova Vista.

In total, the company stopped producing about 90 million tonnes of iron ore, but was allowed to resume operations at Brucutu late in the quarter, restoring some 30 million tonnes of yearly capacity.

A further 30 million tonnes are likely to come back on line by the end of the year using “dry processing” methods that avoid the use of hazardous tailings dams, Vale said.

Brazil’s mining secretary, Alexandre Vidigal de Oliveira, said last week he expected the sector’s main regulator to extend its probe into the causes of the Feijão mine disaster until January 2020.

The National Mining Agency (ANM) investigation is looking into breaches in mining and other administrative rules, while police are separately probing criminal wrongdoing.