Brazil’s Samarco May Resume Operations by the Year End – Reports

In the recent update received, Samarco iron ore mine in Brazil, is expected to resume operations before the end of this year 2018 or early 2019 as reported by Vale executives to investor yesterday (i.e. 28th Feb’18).

Earlier in Nov 2015, Samarco Mineracao, a Vale-BHP joint venture closed operations following a deadly dam burst. The disaster in Brazil’s Minas Gerais state that killed 19 people caused sludge to wash downstream in the river Doce into neighboring state.

Before the disaster, Samarco’s pelletizing operations supplied 30 MnT per year nearly one-fifth of the seaborne trade in the steelmaking raw material that attracts a premium price over iron ore fines and lump ore.

Refurbish of Samarco operation would expect to be capped at 19 MnT p.a.

Samarco Iron Ore and Pellet Production Details:

Fig in MnT
Source: Company Reports

Indian pellet exports to remain benefitted – Chinese steel mills turned towards Indian pellets to make for the Samarco shortage. This resulted in sharp increase in Indian pellet export volumes which climbed up from 5.7 MnT in CY’16 to 9.6 MnT in CY’17.

With Samarco remaining away from the market for one more year, Indian pellet exporters will remain benefitted.

Rising iron pellet supplies from Vale-:

Vale’s iron ore production achieved a record increase of 5.1% to 366.5 MnT in CY’17 against 348.8 MnT in CY’16 due to the S11D ramp up.

Vale’s pellet production achieved a record of 50.3 MnT in CY’17, higher by 9% Y-o-Y. Vale reaffirms its pellet production guidance of around 55 MnT as previously announced.