Excluding Vale (NYSE:VALE), close to 8 million tonnes of seaborne iron ore supply from Brazil is at risk in 2019, a report by Wood Mackenzie states.
According to the market analyst, such a supply disruption would be the result of the new regulation published by Brazil’s National Mining Agency or ANM, which establishes the ban of all dams in the country built with the upstream method.
Based on the new law, companies holding such structures will have six months to present a technical decommissioning project and until August 15, 2021, and August 15, 2023, to fully conclude deactivation processes of inactive and active dams, respectively.
WoodMac reached the conclusion of the supply hitch after analyzing all 226 iron ore tailings dams that the South American country has. Then, the firm’s experts identified those that are of the ‘upstream’ dam type or of ‘unknown’ type and realized there are 35. These are the ones that, in their view, will be impacted by the decree.
“The supply cutbacks will most likely come from Usiminas, Gerdau, Mineração Morro do Ipê and junior miners that sell run-of-mine (ROM) ore to Vale and CSN. Pellet feed production from Usiminas is slated to account for half of the export declines, with the other half being sinter feed from the remaining impacted producers.
For the rest of this article: http://www.mining.com/brazilian-iron-ore-supply-disruptions-expected-report/