Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Brazilian indigenous demanding better public services blocked Wednesday a crucial railway carrying iron ore from Vale’s (NYSE:VALE) Carajas mine in the country’s Amazonian state of Para to the Northeast coast, reported O Globo (in Portuguese).
The Rio de Janeiro-based giant miner did not disclose how much iron ore had been delayed by the protests, but said it has been granted permission to evacuate the protesters. While the order has not yet been carried out, Vale said staff members had already been subject of violent attacks.
The train line, known as EFC, transports about 100 million tonnes of iron ore a year, connecting the vast Carajas mining complex with the Port of Ponta da Madeira on Brazil’s Northeast coast.
Recently Vale has been cutting investments outside of Brazil to focus on local mining projects as rising demand for minerals from China slows.
Last week, the firm —the world’s No. 1 iron ore producer— received a licence from the Environmental Protection Agency of Brazil to build a $19.5 billion expansion to Carajas. The new section, known as the Serra Sul Mine, is expected to start production in 2016 and reach full capacity of 90-million tonnes a year of iron-ore in 2018, or nearly a third of Vale’s existing annual output.
Carajas is the world’s largest iron ore mine and holds 7.2 billion metric tons of iron ore in proven and probable reserves.
