Canadian Mining Journal


IRON ORE: Vale declares force majeure

RIO DE JANEIRO – Vale has declared force majeure on a series of iron ore and pellets sales contracts after a Brazilian state court ordered it to suspend production from its Brucutu mine in the state Minas Gerais.

The court order also bans Vale from storing tailings in the Laranjeiras dam at Brucutu following the collapse last month of the Brumadinho tailings dam at its Feijao iron ore mine that has left at least 134 people dead and more than 150 others missing.

The world’s largest iron ore miner said yesterday it will appeal the court decision and noted that the Laranjeiras dam is a downstream tailings dam, not an upstream tailings dam such as the one that collapsed on Jan. 25 at the Feijao mine.

Brucutu produces about 30 million tonnes of iron ore fines a year and is one of the country’s largest mines.

The court order also prohibits Vale from depositing any tailings in seven other dams – Menezes II, Capitao do Mato, Dique B, Taquaras, Forquilha I, Forquilha II and Forquilha III.

In a separate announcement, Vale said it plans to reduce the use of dams in its operations by increasing the share of dry processing in its production to 70% by 2023.

The company also noted that starting in 2020, it plans to invest about US$390 million on implementing dry stacking disposal.

Vale emphasized that, in 2016, following the 2015 tailings dam disaster at the Samarco mine, which killed 19 people, the company decided to decommission all of its upstream tailings dams. The Samarco mine is a joint venture with BHP Billiton.

On Jan. 29, Vale said it would take as much as 10% of its ore output offline in the decommissioning process.

Commenting after the court order was announced, BMO Capital Markets said “a first pass estimate of the new iron ore equilibrium price would be US$83 per tonne in 2019 (from US$78 per tonne), and US$75 per tonne in 2020 (from US$70 per tonne).”

In a press release on Jan., 31 Vale said it was offering a donation of US$27,021 to each of the families “with missing members or affected by the fatalities.”

This story first appeared on