RIO DE JANEIRO, June 24 (Reuters) - Brazilian miner Vale said on Wednesday it was putting 173 workers on temporary leave as it halts facilities at Feijao and Jangada, as the company closes high-cost treatment plants in an attempt to protect margins amid lower iron ore prices.
The news is the first evidence that Vale is replacing older, higher-cost production with new production from projects that are ramping up elsewhere, a process which the company said it was considering when it published first quarter results.
Vale would not say how much iron ore the treatment plants process. In April, Vale said as much as 30 million tonnes could be replaced over the next two years, in an effective lowering of its production growth forecast.
The employees who work at the plants of Feijao and Jangada in the state of Minas Gerais will be given leave for the month of July, Vale said in an emailed statement to Reuters. The statement confirmed reports in local media citing the mining union.
Vale said the move was “a necessary measure in the face of the current state of the iron ore market” but added that the 173 workers accounted for less than 1 percent of Vale’s employees in Minas Gerais. Other operations at Feijao and Jangada are operating normally, Vale said. (Reporting by Stephen Eisenhammer; Editing by Chizu Nomiyama)