Iron ore $300? Vale’s new dam buster deteriorates

I said recently that iron ore was not going to go to $300 unless we saw some new crisis to supply. Either another busted dam in Brazil or nationalist Indian policy or the like. Well, we have a candidate, via Reuters:

  • Regional Labor Department for the southeastern Brazilian state of Minas Gerais says Vale SA’s decomissioned Xingu dam is at “imminent risk of collapsing.”
  • Vale denies it but has suspended roughly 12mt of production as it clears out.

The Regional Labor Department said in the statement on Wednesday that the area was closed after a request for documents on April 27 and an inspection on May 20. The company will have to take various technical measures to get permission to reopen the area.

“Documents presented by Vale show the Xingu dam is not stable (…), presenting a significant risk of collapse”, the surveillance group said.

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