Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Heavy rains force miners to halt operations in southeast Brazil

Stock MarketsJan 10, 2022 04:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: The logo of the Brazilian mining company Vale SA is seen in Brumadinho, Brazil January 29, 2019. REUTERS/Adriano Machado 2/2

By Gabriel Araujo

SAO PAULO (Reuters) -Heavy rainfall in southeastern Brazil has prompted miners including Vale SA (NYSE:VALE) to suspend some operations, they said on Monday, after downpours caused deadly floods in the northeast and threatened to delay harvests in the midwest.

Rainfall is expected to remain heavy this week in most of top mining state Minas Gerais, after runoff closed roads and railways.

The rains may also have contributed to the dramatic collapse of a canyon rock face in the state on Saturday, killing 10 people visiting a waterfall on boats.

In the northeastern state of Bahia, flooding displaced about 50,000 families and killed some two dozen over the holidays.

Vale said on Monday it has partially suspended operations at its Southeastern and Southern iron ore systems due to the bad weather, but reaffirmed its 2022 production target as the Northern system was not affected.

Samarco, a joint venture between Vale and BHP, also cut back operations in its Germano complex, producing at an estimated 50% of capacity until weather allows it to ramp up.

Brazilian steelmakers Usiminas (OTC:USNZY) and Companhia Siderurgica Nacional (CSN) also halted operations of their mining units.

Anglo American (LON:AAL) said its Minas-Rio system continued to operate as planned during the rainy season.

Over the weekend, France's Vallourec paused its Pau Branco mine after heavy rainfall caused a dike to overflow.

"We see the news as potentially negative for the entire mining sector, as it could result in new regulations to suspend existing operations or delay new projects," analysts at XP (NASDAQ:XP) Investimentos said in a research note.

BTG Pactual analysts said economic impacts could be muted if normal operations are restored quickly, but noted it all depends on how long the heavy rainfall will last.

"We estimate there could be more than 100 million tonnes of annualized iron ore supply at risk at this stage in Brazil, which is a relevant number (roughly 7% of seaborne supply and about 30% of Brazilian supply), so clearly the stakes are high and we could see impacts on short-term iron ore movements," they said.


Vale said in a securities filing that train circulation at its Vitoria-Minas railway was partially interrupted by the rains, halting output at the Brucutu mine and the Mariana complex due to a lack of transportation.

Both mines are part of Vale's Southeastern system, along with the Itabira complex, where production was not affected.

In the Southern system, Vale said all of its complexes had to halt production because key highways BR-040 and MG-030 were closed.

Vale said its Northern System is still operating as planned, and maintained its 2022 iron ore production forecast at 320-335 million tonnes. It noted its production plan takes into account the seasonal rainfall impact.

The miner also said the rains had not changed the alert level for any of its tailing dams which are under constant, "real-time" monitoring.

"While Vale did not change its production guidance for 2022, we believe that the market could start to project volumes closer to the low end of the range," Itau BBA analysts said, noting that iron ore prices could be supported at their current high levels.

Vale's two halted operations accounted for about 31% of its output in the first nine months of 2021, the Itau BBA analysts said. A two-week halt in these operations could represent an impact of about 3 million tonnes for the company, according to their preliminary calculations.

Steelmaker Usiminas announced a stoppage at its mining subsidiary Mineracao Usiminas (MUSA) due to weather, but said it had enough inventory of raw material to avoid disruption.

The company also said its Barragem Central tailings dam, which has been inactive since 2014, reached alert level 1 - an initial warning that does not mean a safety breach was noted.

CSN and its steel mining subsidiary CSN Mineracao SA announced a halt to operations of the Casa de Pedra mine, but said they are expected to resume in coming days.

They said port operations at the Itaguai coal terminal, located in the neighboring state of Rio de Janeiro, were also suspended due to excessive rains.

On Sunday, Brazil's regulatory National Mining Agency (ANM) suspended operations at French steel pipe maker Vallourec's Pau Branco iron ore mine in the state after a dike overflowed, cutting off a federal highway. There were no reported injuries.

"After the dam incidents of the past, we welcome the zero tolerance approach that miners are taking in the country to minimize operational risks, which we consider the prudent approach," BTG Pactual said.

Heavy rains force miners to halt operations in southeast Brazil

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email