London miners dominate market rise after iron giant Vale cuts output
London’s miners dragged the stock exchange upwards this morning after Brazilian iron giant Vale announced another output cut over the weekend.
The company, which is in crisis after one of its dams burst leaving over 300 people dead or missing, said a court had ordered it to stop operating the Timbopeba mine in Minas Gerais state.
Read more: Vale 'fired' inspector who refused to certify deadly Brazil dam
The suspension will hit production by nearly 13m tonnes of iron ore per year, the company said.
It has also been told to stop operations at another dam in the disaster-struck state.
The news seemed to boost mining stocks in London, with platinum producer Lonmin, and precious metals miners Acacia Mining and Hochschild among the top ten risers.
Meanwhile the FTSE 100 risers were dominated by Rio Tinto, up 1.9 per cent, BHP, Anglo American, Evraz and Antofagasta, all in the top five.
They helped ensure the FTSE 100 rose 0.4 per cent to 7,257, while the FTSE 250 was boosted 0.3 per cent to 19,547.
Across Europe the Stoxx basic resources index, which includes many miners, was down 0.3 per cent. In Australia miners underpinned a rise after iron prices increased three per cent.
Last week’s decision is the latest in a long line of decisions in Brazil over the safety of Vale’s operations.
Read more: Brazil to decommission hundreds of dams after Vale tragedy
Last month the government announced it would require all so-called tailings dams, which store waste from mining, to be decommissioned by 2021.
Vale’s share price has begun to recover some of the losses it made after the accident, reaching 50.55 Brazilian reals on Friday after lows of less than 42 reals in February. However, it is still some way off its 56 reals per share valuation before the dam burst.