Iron ore price collapses below $100 as China extends environment curbs

Increasing supply worries after Vale warns of another dam burst.

According to a document published on Thursday, prosecutors said Vale is predicting the dam in the city of Barao de Cocais may collapse next week.

The company said on Tuesday first-half headline earnings is expected to rise at least 160%, boosted by higher iron ore export prices and a weaker rand/US dollar exchange rate.

Vale expects to produce 75 million tonnes this year from the S11D operation in Carajas Serra Sul, its biggest mining project ever.

Approval is subject to conditions, including the protection of national park water resources and endangered ghost bats.

Prices of 65% iron-content ore for delivery to China hit a five-year-peak of $110.5 a tonne on Thursday, while its premium to benchmark 62% ore widened to five-month highs.

Supported metal prices, debts being slashed, and production efficiency growth were the keys for the good performance.

At the same time, CFO Luciano Siani said that quickly restarting production was not the company's top priority after the Brumadinho disaster, for which the company was forced to take nearly $5 billion in writedowns in the first quarter.

The comments coincide with government plans to review existing conservation areas amid growing pressure from mining and agriculture lobbies.