CONCEIÇÃO DO MATO DENTRO, Brazil, June 1 A giant truck carries chunks of sparkling mountainside to a web of yellow conveyor belts at a huge mine in eastern Brazil, a few more hundred tonnes of iron ore that are good for its owner Anglo American but bad for a battered global market.
Part of a new generation of massive mines contributing to a supply glut, the Minas-Rio mine has the scale and modern design to produce iron ore, the main ingredient in steel, at well below the costs of more traditional projects.
“We’ll be competitive wherever the price is,” Paulo Castellari, the iron ore head for Anglo in Brazil, said on a recent visit.
But only a four-hour drive away, in the sleepy town of Itatiaiucu, workers at older mines are being laid off. Almost everyone in the town of 12,000 people follows the price of iron ore and for the last year they have watched it drop in half to near the lowest level in a decade. With it, about 20 percent of mining jobs in the town have been cut, the local union says.
“I go to work every day wondering if I’ll be next,” said José Roberto, 55, who has worked for 27 years at a local mine now owned by steelmaker ArcelorMittal, where the union says 30 of about 300 workers have been laid off in recent months.
A spokesperson for Arcelor confirmed nearly 20 people lost their jobs in April due to the ending of a joint venture project.
Slower economic growth in China, the world’s biggest market for iron ore, and new production from mines like Minas-Rio, has flipped the global market into oversupply.
While the likes of Rio Tinto, BHP Billiton and Vale SA increase output, higher-cost mines from Australia to Sierra Leone are closing.
Minas Gerais, a state the size of France whose name translates as “General Mines”, has for three centuries been the heart of Brazil’s mining industry, its earth rich in emeralds, gold and other minerals. But now as job losses mount, some areas are losing their primary source of income.
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