Iron ore prices hit five-year high after Vale warns of second dam burst
Iron ore prices have hit a five year high today after the world’s biggest producer, Vale, revealed trouble at one of its sites.
Late yesterday Vale said a mining waste dam was on the brink of collapse, just months after one of its dams collapsed, killing hundreds.
Read more: Another Vale dam could collapse next week, miner warns
Prices were pushed up to $100.40 per tonne, a $2.40 rise from Thursday, according to data from S&P Global Platts.
The cost of the iron ore has rocketed this year since Vale’s Brumadinho dam burst in January.
Bad weather has also helped push up international prices by 38.8 per cent since the beginning of 2019.
London-listed Rio Tinto last month said its iron ore production would take a 14m tonne hit due to a cyclone which smashed into Western Australia, while BHP has also cut its outlook.
“Investors expect firm demand for steelmaking raw materials despite high prices as mills would still ramp up output amid strong profitability,” one Shanghai-based trader told Reuters yesterday.
Vale said yesterday that a dam by its Gongo Soco mine may burst within days.
Read more: Production falls at under-fire Brazilian miner Vale after burst dam
“The rupture may happen between 19 May and 25 May, which could cause liquefaction of the south dam,” a document published by prosecutors said.
The local area has already been evacuated, however a rupture could still cause tremendous environmental damage as 6m cubic metres of mining waste could flood the area.