Vale to restart Brucutu iron ore mine within 72 hours

Brazilian iron ore mining company Vale will restart operations at the 30mn t/yr Brucutu mine within 72 hours after the state environmental agency granted it a license to operate the Laranjeiras tailings dam associated with the mine.

Vale had closed its second-largest Brucutu mine on 4 February following a court order. The environmental agency had on 7 February withdrawn its licence to operate the tailings dam.

The announcement is unlikely to have much of an impact on seaborne prices since a court decision allowing mining operations earlier this week was already factored into prices. The Brucutu court order on 20 March saw the Argus ICX 62pc index fall by 3.78pc to $87.25/dry metric tonne as it eased supply concerns.

Brucutu's restart will reduce Vale's supply deficit to around 50mn t/yr from around 80mn t/yr. A fatal tailings dam breach at Vale's Feijao iron ore mine on 25 January has prompted restrictions on Vale's mining operations in Minas Gerais province.

Chinese market participants are more focused on the progress of Cyclone Veronica in Australia, which could potentially disrupt iron ore shipments from key ports such as Hedland and Dampier, as it makes landfall over the weekend.

A Brazilian court has also asked Vale to stop operations at the Dique 3 dam in Minas Gerais. But it will not have any impact on output since it is associated with the Vargem Grande mining complex, where operations have already been halted following an order by the national mining agency.

Vale's mining operations in Carajas region, which produces the high-grade IOCJ fines, has not faced any restrictions so far.