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Brazilian miner Vale suspends iron ore railway line on dam landslide threat

London — Brazilian miner Vale said late Monday it has suspended iron ore railings on part of the Vitoria-Minas Railroad (EFVM), one of two main railways in Minas Gerais state which transports iron ore products to ports for export and serves steel mills in Minas Gerais and Rio de Janeiro states.

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Vale said in a statement the Belo Horizonte branch line between the Sabara and Barao de Cocais areas has been suspended as a precautionary measure on threat of a landslide.

A passenger train service operating on the line between state capital Belo Horizonte and the town of Dois Irmaos had already been suspended since May 16.

Vale, which operates EFVM under a concession, said it is evaluating alternatives to minimize the impact on the network.

The branch runs close to the Gongo Soco mine pit, in Barao de Cocais, Minas Gerais, where Vale identified recent movements on the northern slope of the structure and is no longer mining at the site.

Vale said the partial network suspension was a requirement by the National Mining Agency (ANM) and the suspension will remain in place until Vale has carried out further risk assessments.

The EFVM moves iron ore from Minas Gerais main southeastern mines to Vitoria port, where Vale operates the Tubarao complex of pellet plants and export terminals.

Coking coal comes into Vitoria mainly from the US and Australia for onward delivery to Minas Gerais, Ipatinga-based Usiminas and Ouro Branco-based Gerdau Acominas integrated steel plants.

Since Vale's Brumadinho dam disaster in late January, iron ore pellet plants in Minas Gerais have been idled as dams are decommissioned.

This had been leading Brazilian plants to secure pellets from Tubarao and shipments from Sao Luis in northeast Brazil, which need to be railed in from ports.

Vale said the Gongo Soco iron ore mine and dam are monitored 24 hours a day.

The mine is just east of Vale's Feijao complex, which burst and spewed iron ore tailings killing hundreds of employees and civilians.

Vale said on its website the Vitoria-Minas railroad is 905 km (561 miles) long and transports 115 million mt a year of iron ore. The railroad also carries coal, grains, fertilizers, and steel products.

About 40% of general freight in Brazil goes through EFVM.

The EFVM is linked to the MRS, a private railway owned partly by Vale and CSN, mainly transporting iron ore to Rio de Janeiro-based terminals.

The EFVM links also to the FCA railway in Minas Gerais, which provides vital connections to both EFVM and MRS to link the networks together and serve sites around the state.

The CSN and CSA steel mills in Rio de Janeiro state are dependent on railed supplies of iron ore.

Shortages, particularly of locally sourced pellets, have hit the industry hard as logistics for alternatives have increased costs.

-- Hector Forster, hector.forster@spglobal.com

-- Edited by Jonathan Dart, newsdesk@spglobal.com