Brazilian miner Vale has temporarily halted operations at the Itabira Iron Ore Complex in compliance with a decision issued by the Regional Labour Court in Minas Gerais, Kallanish learns from the company. The stoppage involves the Conceição, Cauê and Periquito mines, and follows all technical criteria and safety protocols, Vale says.

Iron ore prices surged following news of the stoppage. The Kallanish KORE 62% Fe index gained $4.10/tonne to $104.57/dry metric tonne cfr Qingdao on Monday, the highest level since 5 August 2019. The Kallanish KORE 65% Fe index increased $3.59/t to $118.10/dmt cfr, and the KORE 58% Fe index was up $1.67/t to $90.77/dmt cfr.

Vale says of the stoppage: “The ruling will remain in effect until judgment on the merits of the action or until the implementation of control measures to protect from Covid-19 as defined by the labour inspectors, under penalty of a daily fine in the amount of BRL 500,000 ($100,819) fixed in a decision issued on 6 June by the same court.”

The miner’s 2020 iron ore production guidance of 310-330 million tonnes considers a negative impact of 15mt from Covid-19-related restrictions.

“Considering the expected monthly production of 2.7mt from the Itabira Complex for the coming months and the provisioning of up to 15mt of losses associated with the coronavirus outbreak, there is no need, at this moment, to revise the guidance,” Vale confirms.

The company, however, expects a temporary shortage of pellet for the domestic market, given the Itabira Complex provides feed for the Tubarão Complex’s pellet plants, Vale adds.