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The volume of Brazilian exports of iron ore to decline

21 March 2019

It is known that the Brazilian authorities demanded the immediate elimination of hazardous tailings. The reason for the drastic decision was the accident at the mine Corrego do Feijao. It belongs to the company Vale, which was in a difficult position. The accident led to disastrous consequences, including human victims. For the Brazilian government this was the last straw. All hazardous tailings ponds must be eliminated until 2023. Thus, companies will be forced to suspend production of iron ore. Iron ore industry of the country is waiting for hard times.

Wood Mackenzie, a British consulting company. It was estimated the extent of losses. This refers to losses incurred by the Brazilian iron ore industry. Production Vale will be reduced by 50 million tons per year. From them 30 million tons due to the closure of the mine Brucutu. But Vale is not the only company who will be affected by this difficult situation. So a number of companies will be forced to reduce their exports. Moreover, the volume of exports will decrease by 8 million tons. It concerns such companies as Mineracao Morro do Ipe, Usiminas, Gerdau. There are also some small enterprises that will also have to reduce exports. For the most part Vale acquires them from raw ore.

Not all companies in Brazil affected by new bans. For example, CSN and Anglo American Mining of the tailings. Because they can continue their activities. Experts note that the reduction in Brazil’s exports will affect the price. So raw materials on the world market could rise to $ 90. Mean per ton. But growth may be moderate. The Chinese company can purchase fewer ore. They are transitioning to the use of scrap metal.

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