Vale stated that it runs the risk of postponing the resumption of production capacity due to possible delays in inspections, evaluations and authorizations resulting from the effects of the current pandemic.
Sao Paulo. Vale said there may be an impact on the volume of iron ore fines production in 2020 if it is unsuccessful in trying to increase production capacity at its Brucutu mine or if a level reassessment is not successful at the end of the second quarter. emergency of the North / Laranjeiras dam.
In a relevant event Wednesday, Vale said geotechnical and operational teams are testing short-term alternatives for tailings disposal in Brucutu that seek to make it possible to increase production at the unit, which has operated at 40% of capacity. If successful, it could operate at 80%. The Brucutu mine sent tailings to the Norte / Laranjeiras dam, which has been at emergency level 1 since December 2, according to the mining company.
In February, Vale had already cut its estimates for iron ore production in the first quarter to between 63 million and 68 million tons, mainly due to operational problems at the Brucutu mine, its largest producer in Minas Gerais, with an annual capacity 30 million tons. For the full year of 2020, Vale’s current forecast for iron ore fines production is between 340 million and 355 million tons.
Inspections
The mining company’s warning about production was made at the same time as it addresses the coronavirus-related difficulties. The previous day, Vale stated that it risks postponing the resumption of production capacity due to possible delays in inspections, evaluations and authorizations resulting from the effects of the current pandemic. The company was forced to halt various activities after the rupture of one of its tailings dams in Brumadinho (MG) in January 2019, and is dependent on conducting security reviews and approvals by authorities to resume them. Still in Wednesday’s statement, Vale said it continues to improve its Dam Management System (TMS), with the help of international experts.
In January this year, the Registration Engineer (EoR) function was implemented as an additional step in evaluating its structures in Brazil, the company said. EoR has among its powers the carrying out of the regular safety inspection, as well as the issuance of monthly technical reports, continuously interpreting the results of the inspection and monitoring activities of the structures. Vale said that, after analyzing the EoR, it issued 78 positive stability statements (DCE) for the structures of its operating units for ferrous minerals and base metals in Brazil, in accordance with the ordinance of the National Mining Agency (ANM). However, nine permanent dams with negative DCEs, at levels 2 and 3 of the Emergency Action Plan for Mining Representatives (PAEBM).
International
On the side of operations abroad, Vale has periodically paralyzed, since March 24, its distribution center in Malaysia, since it understands that limited resources are not possible to operate the terminal safely, due to the ongoing measures in that country against coronavirus. The shutdown, which was scheduled for at least March 31, is ongoing, as Malaysia has postponed its security measures against the virus until at least April 14, Vale explains. Initially, due to the closure, the company predicted a sales impact of approximately 500,000 tonnes of iron ore in the first quarter of 2020. The company did not say whether it could have an even greater impact if the closure lasts much longer. Previously, the mining company had previously informed other reflections of the virus in its businesses, such as the slowdown in the operation of the Voisey’s Bay mine in Canada, as a precaution to protect indigenous communities affected by the pandemic.
Source: América Economía