Vale Ups Dry Processing Capex To Avoid Tailings Dams

By Glenn Dyer | More Articles by Glenn Dyer

Brazilian miner Vale is looking at spending up to $A3.5 billion ($US2.5 billion) expanding the dry processing capacity of iron ore mines over the next five years.

The move, if it happens would be part of a plan to expand the production capacity at its Carajás Serra Sul (northern) iron-ore mining complex over the next decade to 150 million tonnes a year from 90 million tonnes a year.

Currently, approximately 60% of Vale’s production comes from dry processing; the miner aims to lift dry iron ore processing account to 70% of annual production.

Dry iron ore processing does not require water, which means there is no need for dams and tailings are not generated. In January, a dam collapse at Vale’s Corrego do Feijao mine in Brumadinho that left around 300 people dead or missing.

Besides increasing the proportion of dry processing, Vale wants to improve the operational and logistic flexibility of its premium products (65% Fe ore products) and guaranteeing pellet-feed supply in the domestic Brazilian market.

S11D, the main mining unit in the Carajás region is forecast to produce 75 million of ore this year in 2019, rising to 90 million tonnes next year.

That will help make up for the shortfall from the company’s southern mining system in the wake of mines and dams being closed at some mines in the wake of the January 25 disaster.

Vale is holding to a forecast for 2019 iron ore and pellet sales of between 307 million to 322 million tonnes. Sales this year could be down by up to 60 million tonnes from 2018 levels.

In a forecast labeled “Beyond 2020,” Vale outlined a possible expansion in Carajas Serra Sul to 150 million tonnes or production.

Vale says the move would allow it to cut the use of tailings dams which dominate its iron ore processing, especially in the southern mining system centered on Minas Gerais state where the January 25 dam walls tragedy happened, and the earlier Samarco disaster in 2015.

Reiterating comments made during its quarterly earnings presentation last week, Vale also said it is reviewing its portfolio of assets, considering their risk and return.

The company said that among its challenges is to have a lean portfolio while optimising growth and risk factors.

Some analysts reckon that means some of Vale’s nickel mines could be under pressure.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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