Vale Eases Concerns on Gongo Soco Mine; Global Iron Ore Fines Price Fall

Spot iron ore fines Fe 62% index has dropped to USD 103.5/MT, CFR China on Wednesday (29th May). The prices have dropped down from five year high levels of USD 108/MT, CFR China recorded towards beginning of the week. Prices have recorded decline amidst easing supply post Vale announcement of lower risk at collapsing of Gongo Soco mining pit.

The press release reads as follows “This probability reduces the possibility of impact on the Sul Superior dam. Marcelo Barros, Vale's COO, explains that "today, we have more elements to analyze the shell behavior; and it shows a slide into the extraction site. Thus, there is a great possibility that the slope remains inside the extraction site, without major consequences."

Earlier, Vale identified a movement at the North Slope of the Gongo Soco mine, which is inactive since 2016. The vibration so produced was expected to adversely affect the Sul Superior dam, which is located approximately 1.5 km away from the slope and stores waste from mining operations. As per Vale estimates made earlier, the pace of movement in the Gongo Soco mine was expected to result in rupture of dam. However, Vale has recently announced lowered risk of the dam rupture.