Brazil miner Cabo Verde halts iron ore production to focus on rare earths

Brazilian high-grade iron ore producer Cabo Verde Mineracao has halted its iron ore production to focus on developing the rare earths deposits which are also present at its site in Minas Gerais state in the country's southeast, CEO Tulio Rivadavia told S&P Global Energy.

"We paralyzed iron ore operations in September, unfortunately we weren't able to make ends meet in iron ore," Rivadavia said in an email. "We're concentrating our efforts on our rare earths project."

Cabo Verde was recently producing an average of around 5,000 metric tons/month of high-grade lump ore, he said. The company has a mining license to produce 300,000 mt/year of magnetite ore, has an average grade of 64% Fe and supplies mainly to domestic steelmakers.

The iron ore mining suspension was attributed to high road freight costs due to rising fuel prices.

The news of Cabo Verde's iron ore suspension follows announcements in recent weeks of reductions in iron ore production at Brazil's Usiminas and Itaminas on high maritime freight charges, attributed to the conflict in the Middle East.

Rivadavia said that the company discovered a "very promising" deposit of rare earths in an ionic clay deposit during iron ore excavation. The site at Pocos de Caldas holds neodymium, praseodymium and dysprosium and is near two major ionic clay projects currently being developed by ASX-listed companies Meteoric Resources —whose takeover by Lynas Rare Earths was announced last week— and Viridis Mining and Minerals.

Cabo Verde's rare earths project is still at an early development stage. However, the company said it is already working together with Brazil's CIT-Senai technological innovation and rare earths development institute at Belo Horizonte in Minas Gerais to produce alloys from rare earth samples. The institute plans eventually to produce magnets from rare earths produced in Brazil.