July 22, 2019 / 1:41 PM / 6 months ago

UPDATE 1-Vale Q2 iron ore output falls 33.8% following Brazil January dam break

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SAO PAULO, July 22 (Reuters) - Brazil’s Vale SA said on Monday that its second-quarter iron ore production plunged almost 34% from a year ago as many of its key dams remained all or partially shut down after a deadly dam burst in January.

The drop to 64.057 million tonnes came as several major mines including Brucutu, its largest mine in the southeastern state of Minas Gerais, were at least partially shuttered for all or most of the quarter.

The world’s top iron ore exporter also said that quarterly sales of the raw material fell 15.5% to 61.945 million tonnes.

Production at its giant mine in northern Brazil known as S11D and elsewhere was also hindered by “abnormal rain,” the company said.

Vale, which was forced to take some 90 million tonnes of capacity offline after the dam burst in January, restarted full production at Brucutu late in the quarter, restoring some 30 million tonnes of yearly capacity.

Another 30 million tonnes may come back on line by the end of the year using “dry processing” methods that avoid the use of hazardous tailings dams, the company reiterated on Monday.

Iron ore pellet production fell 29% from the year-ago figure, Vale said. The company cut its full-year pellet output forecast to 45 million from a previously announced 60 million.

At the same time, Vale reaffirmed its previous full-year iron ore and pellets sales outlook forecast at between 307 million to 332 million tonnes.

While the lagging production and sales numbers have squeezed the company’s bottom line, they have also contributed to tighter global supplies of iron ore which have lifted prices to more than five-year highs.

The output and sales figures come a little over a week before Vale’s quarterly results. (Reporting By Ana Mano Editing by Chizu Nomiyama and Susan Thomas)

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