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Vale halts Viga plant

Brazil-based iron ore major Vale SA (BZ: VALE3) has announced another setback in Minas Gerais state, saying on Friday it would temporarily halt the Viga concentration plant after noticing an “inconsistency” in documents relating to the operating permit.
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Viga is expected to add to Vale’s iron ore pellet feed. Image: Maria do Socorro

Staff reporter

Vale took over Viga at the start of this month as it completed the acquisition of Ferrous Resources do Brasil, which was expected to immediately increase Vale's production with 4 million tonnes per year of pellet feed at competitive operating costs, once the Viga 4 project successfully ramped up.

"The operations at the Viga mine are not affected by this decision and will continue as usual," Vale said, adding the operation permit bore no relation to the safety of the tailings dam or the Ferrous operations.

It estimated the impact of temporarily halting the Ferrous operations was about 330,000t of iron ore production per month.

Vale had announced in December the US$550 million agreement to acquire Ferrous, which owned and operated iron ore mines close to Vale's operations in Minas Gerais.

The iron ore price for 62% fines surged above $120/t last month on supply constraints after Vale's fatal Brumadinho tailings dam failure in January and various issues for producers BHP and Rio Tinto in Western Australia's Pilbara earlier this year.

It last closed up 1.13% to $89.55/t, according to MySteel, having fallen from the five-year peak due to increased US-China trade tensions and Vale recently being allowed to bring some shuttered production back online.