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Vale will plough almost $400m into new processing technologies in an effort to limit the use of tailings dams, which have been responsible for two deadly disasters in Brazil in just over three years.
The Rio de Janeiro-based miner said the investment would start next year as it flagged plans to increase the share of dry processing in its production to 70 per cent by 2023.
Tailings dams are used to store waste material left behind after the mined ore is crushed into tiny particles and mixed with water so that valuable metals and minerals can be extracted.
The remaining slurry is pumped to a tailings storage facility. These are typically earth dams and can range in size from no bigger than a swimming pool to covering more than 1,000 hectares.
They present one of the biggest safety challenges for the mining industry because breaches are invariably deadly and cause widespread environmental damage.
When a dam collapsed at Vale’s Córrego do Feijão mine last month it killed 150 people, mainly company employees. Almost 200 people are still missing, presumed dead.
The accident happened just over three years after another tailings dam, jointly owned by Vale and BHP, also burst, killing 19 people.
Vale wants to increase the amount of waste material that is dried rather than stored wet and in December agreed to pay $500m for New Steel, a company developing a dry processing technology.
In the wake of the Córrego do Feijão disaster, Vale has accelerated plans to decommission all tailings dams built using the so-called upstream method. These dams are considered less safe than others built to more modern designs.
But in a surprise move a Brazilian state court on Monday ordered Vale to stop using a dam at its Brucutu mine, even though it does not use the upstream model. The mine produces around 30m tonnes of the steelmaking ingredient a year.
Vale is planning to challenge the decision but if it does not win, that could tighten the iron ore market.
“We see some risk of additional reductions depending on government and regulatory response to the tragedy, as evidenced by the Brucutu closure,” said analysts at Barclays.
Iron ore was priced at $86.65 a tonne by S&P Global Platts before the Chinese Lunar New Year. A fresh assessment will be available on Thursday.
Source: Financial Times
