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Vale may pause Malaysian distribution centre

Vale SA (BZ: VALE3) has flagged an impact on sales of about 800,000 tonnes of iron ore this quarter if it has to shut its Malaysian distribution centre until March 31.

Staff reporter
 Vale runs port operations in Brazil, Uruguay, Indonesia, Malaysia and Oman

Vale runs port operations in Brazil, Uruguay, Indonesia, Malaysia and Oman

It said it could halt the Teluk Rubiah Maritime Terminal from Saturday to comply with restrictions to halt the spread of COVID-19.

"Vale is communicating with the authorities to clarify supposed restrictions imposed by the local government on transportation between cities, what could limit the access of workers to TRMT," it said.

In the event of a closure, Vale said vessels headed to TRMT would be redirected and redistributed among its blending facilities in China with no expected impact on full-year production and sales volumes.

"An immaterial cost increase is expected due to additional logistics," it said.

Vale last month maintained 2020 iron ore fines production guidance of 340-355 million tonnes, but cut March quarter guidance by 5Mt to 63-68Mt on account of bad weather. 

The Malaysian terminal handled 23.7Mt of iron ore shipped in 2019.

The Brazil-based miner said earlier this week it would suspend its Voisey's Bay operation in Canada for four weeks and had sent the majority of its corporate office staff to work from home, among precautionary measures in the face of the coronavirus pandemic.

Vale shares closed 6.9% lower yesterday to BRL38.65, capitalising it about 204 billion (US$40 billion).

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