SAO PAULO (Reuters) – A decision by Brazilian mining company Vale SA to halt production at ten sites in Minas Gerais state following a deadly dam disaster has affected deliveries of iron ore pellets to clients, newspaper Valor Econômico reported on Monday, citing industry sources.
Vale is trying to resolve the problem by bringing iron ore pellets produced in the northeastern state of Maranhão to clients in the southeast. The longer distances involved are adding to transportation costs, Valor said.
Vale did not immediately respond to a request for comment on the Valor report.
Privately owned Grupo Ferroeste told the newspaper its pig iron unit in Espírito Santo state has turned off a blast furnace affecting about 40 percent of the plant’s production capacity. Ferroeste did not immediately answer a Reuters request for comment.
Marco Polo Lopes, president of lobby group Aço Brasil, told the newspaper the situation could force other steelmakers to halt production if nothing is done to normalize supplies.