BHP and Vale have reached a non-binding agreement that will see Vale transfer the Timbopeba open pit mine to Samarco to provide a solution to tailings storage should production re-start. Samarco had historically stored tailings in its previously mined out Germano pit and is planning to use the southern part of the Alegria complex for tailings storage as part of the re-start plan.
We note that the Fundão tailings dam failure wiped out Vale’s conveyor system that transported ore from Fábrica Nova to the Timbopeba process plant and Vale was also selling ore from its Fazendão mine, which is located north east of the Alegria pit, to Samarco. The new agreement suggests to us that Vale has secured an interim ore source for the Timbopeba processing facility until the tailings dam at Fundão is repaired to a level that will allow Vale to rebuild the conveyor system.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
