Vale has been granted governmental permission to reopen the Brucutu iron ore mine in the state of Minas Gerais, Brazil.
The Brazilian iron ore miner said on Tuesday it expected to resume Brucutu’s operations “in the next 72 hours”, with a mid-range guidance of 307–332 million tonnes for the year.
This estimate takes into account the effect of heavy rains throughout March and April.
Brucutu was closed on February 4 at the request of state prosecutors after Vale’s Fundão mine in Brumadinho suffered a massive tailings dam breach on January 25, resulting in over 200 deaths and chief executive Fabio Schvartsman’s resignation.
However, a Brazilian court’s decision to overturn an injunction preventing Vale from reopening Brucutu – the largest mine in the region and the second largest in Brazil on Tuesday – reintroduces 30 million tonnes a year of iron ore output into the market.
This announcement caused the share prices of its Australia iron ore rivals such as BHP, Fortescue and Rio Tinto to dip.
Rio Tinto’s shares fell around 4.6 per cent to $96.50 on Wednesday, while Fortescue’s fell by 8.9 per cent to $7.41. BHP’s shares have also fallen 2.9 per cent to $38.29.
Vale had committed to the shutdown of 19 tailings dams over a three-year period since its Samarco tailings dam incident with BHP in November 2015. The shut down included the decommissioning of Vale’s Laranjeiras tailings dam at Brucutu.
The company in its latest quarterly report estimated a drop in its annual production totalling around 92.8 million tonnes on the impact of the Brumadinho dam rupture. The company, however, remains the world’s largest producer of iron ore, iron pellets and nickel.