Vale, the world's second-largest iron ore giant, has suspended production at some iron mines due to heavy rains in southeastern Brazil.
Vale said in a statement on Monday that it had partially suspended iron ore production in the southeastern and southern systems and train services on the Estrada de Ferro Vitoria a Minas railway in order to ensure the safety of its employees and communities.
In the first nine months of 2021, mines in these areas accounted for 40% of Vale's iron ore production, according to data. In a statement on Monday, despite the torrential rain, Vale reiterated its production target of 320 million to 335 million tons by 2022.
As Vale suspended production at some mines and iron ore prices were pushed higher again, Singapore futures rose nearly 3 per cent at one point on Tuesday, up about 50 per cent since November.
Some analysts point out that shipments in Brazil and Australia, the major producers, have both fallen by nearly 20 per cent in the most recent week, as well as factories restocking, supporting prices.
It is understood that Vale's northern system for producing high-grade iron ore will continue to operate according to the production plan, which the company said took into account the impact of the rainy season on its business.
Vale said last week that it had suffered a landslide at its Salobo III, copper project in the northern Brazilian state of Para, which was also caused by rain.
Over the weekend, heavy rains hit the state of Minas Gerais in southeastern Brazil, blocking highways and affecting mining companies. Near the city of Belo Horizonte, French company Valurek's mining embankment overflowed.; CSN Mineracao SA said mining and transport operations at the, Casa de Pedra mine had been temporarily suspended due to torrential rain; Usiminas's mining subsidiary also suspended operations.
It is worth mentioning that Minas Gerais was the site of the Blumadino dam collapse in 2019, which killed 270 people and Vale was charged with environmental crimes. In the aftermath of the incident, Vale lost its title as the world's largest iron ore producer and is now striving to return to the top.
