Australia’s booming iron ore stocks are tipped to stay higher for longer in the wake of the latest blow to Brazilian producer Vale’s plan to reopen mines that were shuttered in the wake of the tragic Brumadinho tailings dam collapse.
Vale was forced to suspend work at its 30 million tonne-a-year Brucutu mine on Monday after a Brazilian court overturned an earlier ruling that it could reopen.
The ruling from the higher court came as Vale said it expected sales of iron ore and pellets to be at the low to mid-end of previous guidance of 307 million tonnes to 332 million tonnes in 2019.
The Fortescue Metals Group share price jumped 6.3 per cent to $7.60 in the wake of the Vale announcement. Rio Tinto and BHP gained 2.3 and 1.4 per cent respectively.
The shortage in global supply, exacerbated by cyclone disruptions in Western Australia in March, has seen iron ore stockpiles in China fall to their lowest level since October 2017.
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