London — Iron ore prices may react next week after Vale said the Corrego de Feijao iron ore mine in Brumadinho, Minas Gerais, suffered a breach on Friday, spilling wet tailings into a town.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The expected hit on supply may be seen in deliveries to China and other markets in March, when some participants expected there may be stronger steel-related demand as Chinese plants restock and operate at higher capacity.
On Friday, IODEX 62% Fe fines was assessed at $75.40/dry mt CFR China, with prices moving up by around $15/dmt in a run of price increases since early December.
The dam burst comes as a cyclone nears Western Australia and threatens the inland Pilbara mining area. Ports began to prepare clearing vessels from Thursday, disrupting iron ore shipping.
Such mining accidents typically lead to production halts and inspections, with the mine lying in the main iron ore quadrangle and part of Vale's southern system iron ore operation. Vale said tailings had reached the community of Vila Ferteco and did not confirm any fatalities in its initial statement on the incident.
Vale's 50% owned Samarco suffered a fatal tailings dam burst in November 2015, which had shuttered the pellet and high grade concentrate operation until now.
Vale has focused its iron ore production in the southeast of Brazil for low alumina sinter feed material and ores used to blend with northern Carajas iron ore, at offsite ports in Asia, to make the BRBF product.
Since the Samarco incident, silica content had risen in southern Brazil iron ore products, due to reduced wet processing, and slowdown in licensing of new mining areas and processing pits.
The industry has developed dry tailings processing to be rolled out over the next few years, to reduce the impact and need for dams and pits filled with wet tailings.
-- Hector Forster, email@example.com
-- Edited by Richard Rubin, firstname.lastname@example.org
Steel Markets Daily
Platts Steel Markets Daily is a leading source for steel raw materials news and prices (including met coal spot prices; Platts IODEX and TSI 62% benchmark assessments). Click the link below to receive the publication for a short period of time.Free Trial